The high-profile nature of 39-year-old Joshua Toole's older brother, who is also the deputy premier, meant he was being kept in segregation for 23 hours a day since being charged in October, the NSW Supreme Court heard on Thursday.
Justice Julia Lonergan said the condition of his confinement was "utterly unacceptable".
"If they can't come up with something better than 23 hours a day keeping someone in a cell then really it's a problem," she said.
"This to my mind is entirely unsatisfactory no matter what the reasons considered to be a proper basis for that detention."
Toole was charged in October with supplying a large commercial quantity of a prohibited drug, participating in and directing the activities of a criminal group and contributing to criminal activity as well as supplying prohibited drugs on an ongoing basis.
The court heard he is accused of supplying more than 1.8 kilograms of methylamphetamine.
Justice Lonergan released Toole on bail with more than 20 "stringent conditions" including a house being put up as assurance that he will return to court.
He also can't own a smartphone, has to abide by a curfew, abstain from drugs, undergo testing and report to police daily.
Toole's case will return to a local court on December 7.
The deputy premier has been contacted for comment.
