SPY agency ASIO wants to hack into Australians' personal computers and commandeer their smartphones to transmit viruses to terrorists.
The Attorney-General's Department is pushing for new powers for the Australian Security Intelligence Organisation to hijack the computers of suspected terrorists.
But privacy groups are attacking the ''police state'' plan as ''extraordinarily broad and intrusive''.
A spokesman for the Attorney-General's Department said it was proposing that ASIO be authorised to ''use a third party computer for the specific purpose of gaining access to a target computer''.
''The purpose of this power is to allow ASIO to access the computer of suspected terrorists and other security interests,'' he told News Limited.
''(It would be used) in extremely limited circumstances and only when explicitly approved by the Attorney-General through a warrant.
''Importantly, the warrant would not authorise ASIO to obtain intelligence material from the third party computer.''
The Attorney-General's Department refused to explain yesterday how third-party computers would be used, ''as this may divulge operationally sensitive information and methods used by ASIO in sensitive national security investigations.''
But cyber specialist Andrew Pam, a board member of the Electronic Frontiers lobby group, predicted ASIO could copy the tactics of criminal hackers to seize control of target computers.
Australians' personal computers might be used to send a malicious email with a virus attached, or to load ''malware'' onto a website frequently visited by the target.
''This stuff goes on already in the commercial and criminal world, and security agencies could be using the same techniques to commandeer people's computers and use them to monitor a target,'' Mr Pam said.
''Once you get control of a computer and connect to their network you can do whatever you want.''
The ASIO Act now bans spies from doing anything that ''adds, deletes or alters data or interferes with, interrupts or obstructs the lawful use of the target computer by other persons''.
But ASIO wants the ban lifted, so Attorney-General Nicola Roxon can issue a warrant for spies to secretly intercept third-party computers to disrupt their target.
The departmental spokesman said the federal government had made ''no decisions'' about whether to grant ASIO the new power.
The government would first consider advice from the federal Parliamentary Joint Committee on Intelligence and Security, which is reviewing national security legislation.
Victoria's acting Privacy Commissioner, Dr Anthony Bendall, has told the committee that ASIO's proposed new powers are ''characteristic of a police state.''
''To access a third party's computer, which has no connection with the target, is extraordinarily broad and intrusive,'' his submission states.
But the Attorney-General's Department insists that ASIO will not examine the content of third-party computers.
''The use of the third party computer is essentially like using a third party premises to gain access to the premises to be searched, where direct access is not possible,'' it states in response to questions from the committee.
''It involves no power to search or conduct surveillance on the third party.''
The department said technological advances had made it ''increasingly difficult'' for ASIO to execute search warrants directly on target computers, ''particularly where a person of interest is security conscious.''
Australian Council for Civil Liberties president Terry O'Gorman yesterday said ASIO should have to seek a warrant from an independent judge, rather than a politician.
He warned that ASIO might be able to spy on individuals - including journalists protecting a whistleblower - by tapping into their computers.
''I'm concerned they will access all sorts of information on a computer that has nothing to do with terrorism,'' he said.
