A High Court challenge has been launched against the indefinite detention of a Sri Lankan woman who received an adverse security assessment from ASIO.

The woman, Ranjini, was pregnant and living in Melbourne when she was originally granted refugee status.

But a subsequent adverse security assessment saw her flown to Sydney with her nine and seven-year-old sons and new born baby and detained at Villawood Detention Centre, where she has now been for 14 months.

Ranjini's children are also living in detention with their mother and remain indefinitely detained in Australia unless a third country will take them.

Ranjini is the widow of a former senior Tamil tiger, the separatist group which lost the long-running civil war in Sri Lanka.

She admits to membership of the group in her youth but she has not been able to find out the reasons for ASIO's decision.

The woman's lawyer David Manne, from the Refugee and Immigration Legal Centre, says her challenge will be used as a test case for more than 50 other people in indefinite detention.

Many are also Sri Lankan Tamils who have been found to be refugees but have also had adverse security assessments.

"She's never broken any law and she's never had the chance to defend herself in court against this security assessment," Mr Manne said.

He says the court will be asked to rule whether her continued detention is lawful.

"Ranjini is a refugee and mother of two young boys and a five-month-old baby and she's asking court to decide whether it's lawful for the Government to detain her indefinitely on and possibly forever the basis of a secret security assessment," he said.

"There are more than 50 people in a similar situation that is refugees with adverse security assessments and this case will have significant implications for their liberty too."

Transparency of ASIO detention questioned

All asylum seekers are assessed by ASIO and Sydney legal academic Ben Saul says the background checks are generally wide-ranging.

"It includes things like whether someone is a risk of espionage or foreign interference or sabotage, political violence like terrorism or other kinds of political violence but also things most recently like border security," he said.

Attorney-General Mark Dreyfus spoke to Lateline before he was aware of the specifics of Ranjini's case but defended the ASIO's approach.

He said an independent reviewer oversees ASIO's decisions and has quashed the spy agency's assessments in two cases.

Another person was released after ASIO reassessed its own decision.

"I'm not going to comment on independent cases other than to say that after (former federal court) Margaret Stone has carried out a review of an adverse security assessment, she will go back and review it in 12 months' time and as well at any time ASIO can go back and revisit a case," he said.

"As with all intelligence matters it's not appropriate for ASIO to reveal all the details to reveal all the operational details because to do so would be to put it bluntly to arm our enemies."

But critics say the current review process still is not transparent enough.

"The problem at the moment is that ASIO is judge jury and executioner," he said.

"There's pretty much no external independent binding process that ensures that ASIO must act within the law."

Ranjini's legal team hope the high court case will start next week.