A SECRET Australian intelligence assessment has declared the al-Qaeda terrorist network a failure and claims its regional offshoot, Jemaah Islamiah, has been broken in Indonesia.

The head of Australia's intelligence analysis agency, the Office of National Assessments, told US diplomats in October 2008 that al-Qaeda ''ultimately has failed to achieve the strategic leadership role it sought within the Islamic world''.

The assessment undercuts a key argument of the Gillard government to justify Australia's continued commitment to the war in Afghanistan: that al-Qaeda could return to use the country as a terrorist training ground.

Australian intelligence officers instead blamed Taliban success in Afghanistan on the failings of the Afghan government and the involvement of Pakistan's intelligence and security agencies.

Pressed by the US diplomats for an overall assessment of Islamist terrorist threats, the then ONA director-general, Peter Varghese, gave a strongly upbeat view.