A disgraced company accused of inciting racial hatred in South Africa was selected by the Federal Government as a potential advisor on countering extremist violence.

Key points: Bell Pottinger sat on Government's "countering violent extremism research panel" for four years

Bell Pottinger sat on Government's "countering violent extremism research panel" for four years Government spokeswoman says including them on panel "did not constitute a recommendation"

Government spokeswoman says including them on panel "did not constitute a recommendation" PR firm has "long client list of disreputable, corrupt" figures, counter-terror expert says

The reputation of British PR firm Bell Pottinger has collapsed in recent weeks after reports it used fake social media accounts to exploit apartheid-era divisions for financial gain.

The fake accounts slandered those attacking the company's client, the Indian-born Gupta business family, and claimed white-owned businesses were holding the economy back.

The campaign has been internationally condemned and described by the head of the UK industry group as setting South African society back "probably a decade".

Until last year, Bell Pottinger had sat on the Australian Government's "countering violent extremism research panel" for four years.

The panel was selected by the Attorney-General's department and included think tanks, companies and universities that could inform deradicalisation programs.

Being selected for the panel did not guarantee Bell Pottinger work, but it listed the company as an appropriate source of advice for all Government agencies.

That prompted security experts to raise concerns about the Government's vetting processes, particularly given the company's ties to notorious dictators.

'They had gone into the dark side'

When the company was selected for the panel in 2012, its links to the Pinochet Foundation and the al-Assad regime were already known.

"They had a long client list of disreputable, corrupt and often violently authoritarian figures in developing nations, including Bashar al-Assad in Syria," said Greg Barton, a counter-terrorism expert from Deakin University.

Bashar al-Assad was a client of Bell Pottinger. ( Reuters: SANA, file )

"They had gone so much into the dark side of burnishing the image and credentials of authoritarian and violent figures, that they couldn't be used for any legitimate Government projects."

During the same year the company was selected for the panel, its senior executives were recorded boasting about how they could use "dark arts" to bury bad media coverage of companies.

Bell Pottinger was also reportedly contracted by the US Government to run a propaganda and disinformation campaign in Iraq, spreading videos that appeared to be made by Al Qaeda.

A spokeswoman for the Attorney-General's department said it "did not engage or contract Bell Pottinger to provide any services under the panel arrangements".

"Bell Pottinger was just one of a large number of successful applicants to be placed on the panel," the spokeswoman said.

"The panel was available to all Commonwealth, state and territory agencies."

The spokeswoman said including Bell Pottinger on the panel "did not constitute a recommendation by the Attorney-General's Department".

'Not a company you'd want to associate with'

Dr Barton said the company's reputation was now "mud" but there were clear signs in 2012 that the company was not fit to be involved with a sensitive national security issue.

"This particular company is certainly one that you wouldn't want any association with now or in the past," Dr Barton said.

"It just wouldn't be sensible to work with a firm that had a dark and disturbing client list and a history of doing black operations, or very questionable things."

Clarke Jones, a deradicalisation expert at the Australian National University, said the Government was reliant on advice from providers with no real connection to life in minority communities.

"If they have no relationships with communities, then they have no access to those youth requiring intervention or support," Dr Jones told the ABC.

"I am not sure whether the Government fully understands the negative ramifications of their current countering-violent extremism approaches."

The ABC has contacted Bell Pottinger for comment.