The Commonwealth Director of Public Prosecutions has begun legal action to seize the proceeds of former Guantanamo Bay prisoner David Hicks' memoirs.

Mr Hicks is a now a free man but he has been served with a restraining order as the DPP begins action to get at the earnings of his book, titled Guantanamo My Journey.

It is the first part of a process to prevent the money being spent or transferred, before an application is made under the Proceeds of Crime Act to seize the funds.

The move follows an Australian Federal Police investigation into the 35-year-old, who was sent to Guantanamo Bay in late 2001 after he was captured in Afghanistan by the Northern Alliance and handed over to US forces.

He was released from Guantanamo in 2007 after signing a pre-trial agreement in which he admitted providing material support for terrorism.

He then spent another seven months in Adelaide's Yatala prison before being released in December 2007.

Mr Hicks' book - in which in he describes being tortured at the hands of the US military - has sold 30,000 copies since it was published earlier this year.

The matter is to be heard in the New South Wales Supreme Court on the August 3.

Entrepreneur Dick Smith, who is a supporter of Mr Hicks, says the DPP's move is "stupid".

"I'm absolutely amazed that the Government could be so stupid because David Hicks has never been convicted in a proper court of any crime," he said.

"So I suppose the advantage for David Hicks now will be that possible the issues can be seen in a proper court of law and I think that will be an advantage for him, that's what I always wanted."

Federal Attorney-General Robert McClelland refused a request for an interview with the ABC, saying the matter is before the courts.

Constitutional lawyer Professor George Williams, from the University of New South Wales, says the case will be significant.

"[It is] not surprising that it has happened, it would appear that the statute at least on its face covers the situation of David Hicks and any proceeds he would make out of his book Guantanamo My Journey," he said.

"There are real issues that David Hicks can raise in response and it may well be that this takes and twists and turns and may even up possibilities for David Hicks to gain recognition that his offence was not one that should be recognised under Australian law.

"He may well [raise] issues going to the nature of his plea, whether duress was involved, whether it was a plea that should be recognised under the Australian legal system, and that could go to quite fundamental questions about the rule of law and the types of proceedings that can be properly recognised under Australian law.

"He could even well raise constitutional arguments about the capacity of the Commonwealth and Australian courts to make these type of orders based upon military commissions overseas.

"It does mean in my view that even though this is starting off in the Supreme Court, it would not be surprising to see this end up in the High Court deciding some quite important matters of principle."

But Professor Williams believes the Commonwealth has a good chance of succeeding.

"For David Hicks to defeat the claim, the attempt to seize those assets, he will need to raise some questions which go to the heart of the nature of his conviction," he said.

"He would need to raise the sort of questions that would suggest that even though the statue seems to cover him, it's just not appropriate for that to occur given the nature of the conviction and given the sort of protections that we have in our legal system around independent tribunals and around the sorts of convictions that should be recognised."