Philip Barker, 47, forged cheques over an 18-month period to pay for his chronic gambling habit with the majority of the cash frittered away in gaming machines at betting shops and bingo halls near his home in Cross Gates.
Leeds Crown Court also heard how Barker, who also worked as a part time insurance collector, acted as a modern-day 'Robin Hood' by handing out almost £20,000 to customers he deemed were in need of financial help.
Barker, of Dovedale Gardens, pleaded guilty to five charges of forgery, related to fraudulent council cheques.
He also pleaded guilty to three charges of false accounting. A further 25 similar offences were taken into consideration.
A judge yesterday jailed Barker for 18-months despite hearing how he had now repaid almost every penny.
The father-of-two surrendered around £108,000 in pension entitlement he had built up over the years working for the council.
He also remortgaged his home and even got a job as a market trader in order to pay off the remaining account.
Mr Recorder Bain Graham told Barker: "The public have a right to expect high standards of probity in dealing with their money."
Malcolm Taylor, prosecuting, told how Barker was one of only a small number trusted employees who were allowed to withdraw cheques manually in case there were errors with the computer system.
Mr Taylor said that Barker, who was paid a £30,000 salary, forged legitimate cheques payable to a Mr Parker by changing the capital latter from P to B and then payed them into his own account.
The barrister said there was also a 'Robin Hood element' to the false accounting offences which arose out of his work as a collector for the London Scottish insurance agency.
During the course of his work he met people he thought deserved financial assistance.
He was able to obtain signatures required for cheques to be paid into their accounts and told his customers that they were the beneficiaries of a Leeds City Council fund set up to assist those in need.
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Mr Taylor said: "The defendant had been entrusted for a very long period of time and when he requested counter signatures he was able to get them."
Barker was eventually caught last April when a colleague became suspicious.
Daniel Cordey, mitigating, said Barker immediately resigned from his job after being caught and made full admissions to the police.
He said he immediately handed over the remaining money in his bank account and later agreed to give up his pension entitlement as well as extend the mortgage on his home and work as a market trader to pay off the debt.
Mr Cordey said many of Mr Barker's friends and colleagues wrote letters of support on his behalf. He added: "This is a man who is ordinarily a perfectly good and decent man, but when he is gripped by gambling he allows it to overwhelm him."