Senator Ellison said the weapons were being made on the property but he would not say exactly where it was. "There is no doubt that if you manufacture an Owen submachine-gun with a 30 round clip to go with it that is a very serious weapon indeed," Senator Ellison told The Age.

"It's not designed for duck shooting. These are highly dangerous weapons. "In view of the situation in Victoria, the seizure is of even more significance. "These weapons could see an escalation of violence - there's no doubt about that.

"These are very powerful weapons, tailor-made for criminals and serious criminals." Senator Ellison said investigators were still trying to ascertain the weapons' destination.

The joint investigation had been under way for five months, he said. The Owen gun was a simple, lightweight and effective firearm invented in Australia and mass-produced during World War II. Australian troops used the weapon in New Guinea and elsewhere. The discovery of silencers with the weapons was of grave concern, Senator Ellison said.

"The silencer is a sinister element," he said. "That is very, very serious. "It's an even greater concern in Victoria because of the problems we have there with organised crime."

The weapons haul also included four pistols and revolvers, a pistol crossbow, two bayonets and 31 "long-arms" including shotguns, bolt-action rimfire and centrefire rifles and semi-automatic centrefire rifles. Senator Ellison said it was particularly worrying that the Owen guns were being made in Australia. Already, about 4000 firearms were stolen each year in Australia and found their way to the criminal market.

Senator Ellison said the fight against illegal firearms was a priority and the crime commission and its partner agencies had been building up intelligence on the syndicates involved. "We have implemented a number of measures targeted at the criminal misuse of firearms, including new cross-border firearms trafficking offences, which have a substantial maximum penalty of 10 years' imprisonment and a fine of $275,000," he said.

Senator Ellison said the crime commission's budget would be increased by $1.5 million to disrupt illegal firearms syndicates. He said the investigation was continuing and several people were helping the ACC with its inquiries. The crime commission, which replaced the National Crime Authority, has the coercive powers of a standing royal commission and its main target is organised crime.