Prime Minister Scott Morrison has categorically denied telling senior colleagues to exploit concerns about Islam for political gain, insisting he sought to confront Islamophobia.

Key points: Scott Morrison said he never told senior colleagues to exploit community concerns about Muslim migration

Scott Morrison said he never told senior colleagues to exploit community concerns about Muslim migration The Prime Minister accused Waleed Aly of being "very emotional" and "over the top"

The Prime Minister accused Waleed Aly of being "very emotional" and "over the top" Mr Morrison refused to say whether his party should preference One Nation and Fraser Anning last.

In a tense interview with Waleed Aly on The Project, Mr Morrison accused the host of being "very emotional" during an editorial on the program on Friday, and suggested he'd said things that were "over the top".

In his editorial, Aly cited media reports of a senior Liberal in a shadow cabinet meeting in 2010 suggesting the party use community concerns about Muslims failing to integrate as a political strategy to gain votes.

"That person is now the most senior politician we have," Aly said.

The Prime Minister's office strongly criticised that report and claimed aspects of it were defamatory, despite the original journalists sticking by the story.

"You implied that Muslims couldn't feel safe because they had a Prime Minister who somehow had been prejudiced against them and I don't believe that's true, and I don't think you believe that's true either," Mr Morrison said.

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Aly said his comments about exploiting concerns were based on reports by multiple reporters, based on multiple sources, with one willing to go on the record.

"No, that is not true," Mr Morrison responded.

"What is suggested is that I said that we should exploit concerns about Islam in the community to our advantage.

"I was concerned that we needed to address them, which is what I have been doing inside and outside of the Parliament for the last 10 years of my life.

"I was acknowledging that there were these fears in the community and that we had to address them, not exploit them."

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Mr Morrison said he did not believe the Coalition had a problem with Islamophobia.

"I don't think the Liberal Party does as a total group. And I don't think the National Party does either," he said.

"Our party is made up of a lot of individuals and in our parties. Individuals have a lot more freedom to say what they think than other parties.

"It's not for the party to answer for every single member on every occasion."

Preference deals with Pauline Hanson's One Nation

Former Liberal West Australian premier Colin Barnett has warned Mr Morrison that a preference deal with One Nation would be "incredibly foolish", having himself suffered a crushing election defeat two years ago after striking a deal with Pauline Hanson's party.

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Mr Morrison has repeatedly said federal Liberal Party policy was not to do deals with One Nation but, when repeatedly pressed, wouldn't confirm if they would preference the party last on how to vote cards.

"We will make those decisions clear at the time of nominations," he said.

Deputy Prime Minister Michael McCormack has left the door open for preference deals with One Nation, insisting the Greens should be preferenced last because that party offers "a danger to our social fabric and all the things the National Party holds near and dear".

That attracted a rebuke from his NSW National counterpart, Deputy Premier John Barilaro, who said putting the Greens last was "stupid"

"I think that if that was a comment made today by Michael, he'll have to re-consider. I think he'll need to talk to his party," Mr Barilaro said.

"I find it odd that the party was in favour of that position, and my message to him would be that that is a stupid decision to make if he's considering it."

Morrison can't say how many rapists, murderers on Nauru

The Prime Minister also admitted he did not know how many convicted "rapists and murderers" were currently on Manus Island.

Senior Coalition figures have argued the medical evacuation bill will allow these people into Australia, although the Immigration Minister has the discretion to block their transfer if they have been convicted or pose a national security threat.

Mr Morrison said the advice he had received from multiple departments suggested this was not the case.

Aly asked whether describing a small section of asylum seekers as rapists and murderers created a prejudice.

"You've got to be honest with people," Mr Morrison said, before suggesting Aly was "sugar-coating" the threat of the bill.

Aly repeatedly asked Mr Morrison to state exactly how many convicted rapists and murderers were on the island.

"There only needs to be one, that's my answer," Mr Morrison said.

"There are a number… I don't have the number to hand, but this is getting into a semantic discussion. What I am saying to you Waleed is this, though, don't sugar-coat this stuff.

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"I'm afraid, mate, that sometimes you can be accused of that."

The Prime Minister would only say that the number of people were part of a group that the Government had concerns about.

"There are almost 60 who are identified as having serious character concerns, who in other circumstances we would never allow to be transferred to Australia," he said.

"They exist and they are there and those crimes have been committed in Papua New Guinea."