The Immigration Department, which blocked the release of large numbers of documents relating to Haneef's case under Freedom of Information (FOI), rejected any possibility of releasing them, The Australian said on Friday.

Haneef's lawyers have asked the court to overturn the Immigration Department's decision that is said to jeopardise further investigations and discourage bureaucrats from giving frank advice to ministers, the report said.

The move came as federal Attorney-General Robert McClelland's office denied extending the inquiry to consider the actions of government agencies, including the Australian Federal Police, which maintains that Haneef is still a suspect and under investigation.

The Indian doctor was charged with recklessly helping a terrorist organisation after his SIM card was allegedly found with a cousin linked to the failed UK car bombings last year.

The charges were dropped after he spent three weeks in detention but the government revoked his work visa on "character grounds". However, the Australian judiciary quashed the government directive and his visa was restored.

In April, an Australian inquiry was launched into the bungled case.

However, the inquiry, headed by former Supreme Court judge John Clarke QC, has been criticised by legal experts because it is being held behind closed doors and without powers to ensure the release of documents or compel potential witnesses to give evidence or face cross-examination.

One of Haneef's lawyers, Rod Hodgson this week wrote to McClelland requesting an extension of the time period of investigations by Clarke to take in the current AFP probe.

Clarke indicated that the scope of the inquiry was restricted to the time of Haneef's arrest on July 2 last year to his flight to India on July 28.

"We would suggest that, if Clarke is restricted in his inquiry to the events of July 2007, the major questions concerning the conduct of the AFP and its commissioner will remain unanswered," Hodgson argued.

"These include the issue whether the continued investigation and expenditure of resources is justified on any basis or is it just an attempt to avoid acknowledging the errors of the past, an attempt that continues at the expense of the taxpayers of Australia and the reputation of Haneef and his family."

The AFP's investigation into the case has so far cost taxpayers almost USD eight million nine months after charges against Haneef, 27, were dropped.

A spokesman for McClelland said it was up to Clarke to request an extension in the inquiry's terms of reference.

Hodgson confirmed he had taken the matter to the Administrative Appeals Tribunal for a review of the Immigration Department's refusal to release documents under FOI.