Australian Ben Zygier has been identified by the ABC as Israel's 'Prisoner X' who was found hanged in his cell in 2010. Courtesy: ABC Foreign Correspondent

INVESTIGATIONS have begun into revelations that Australian officials were told of the jailing of Victorian man Ben Zygier in the months before he died in his Israeli prison cell, but failed to pass the information on.

Israel's top diplomat in Australia though refused to comment on the shadowy case of Melbourne man and suspected Mossad spy Ben Zygier.

Ambassador Yuval Rotem was surrounded by reporters asking about the case when he attended an event at the Australian National University in Canberra today.

"I won't be providing any comment," he told the reporters. "I told you guys I've got no comment to make about this. When I can, I shall let you know."

The lawyer for the suspected Mossad spy says he met with his client the day before he committed suicide and that Zygier denied the allegations against him.

Avigdor Feldman told Israeli Channel 2 that his client, Ben Zygier, was "rational" and that the two discussed legal options, including a plea bargain.

Feldman says Zygier denied the "serious crimes" he was suspected of.

Meanwhile, Foreign Minister Bob Carr yesterday ordered an inquiry into the consular handling of the case after it emerged that his department learnt of Zygier's jailing from another Australian agency, believed to be ASIO, in 2010.

At the time, Zygier was known to the world only as "Prisoner X" after the Israeli government banned local media outlets from reporting the case due to what was believed to be a national security incident.

Zygier died in December 2010 in a claimed suicide, but questions have been raised given the secrecy of his jailing and his isolated cell purportedly being suicide-proof.

Senator Carr was originally advised by his department that it was only aware of Zygier after his death by family seeking help to bring his body home to Melbourne.

But as revealed by news.com.au yesterday, DFAT officers had not passed the information on through the appropriate channels.

Senator Carr's office said it may seek more information from the Israeli government as part of the inquiry by DFAT secretary Peter Varghese.

"DFAT had originally advised us that it was unaware," a spokeswoman said. "DFAT has now advised that some officers of the department were made aware of Mr Allen's detention at the time in 2010 by another Australian agency."

The government would not say if it knew then he was the "Prisoner X" being reported at the time or simply just an Australian.

Zygier was a member of a prominent Jewish family in Melbourne, where his father Geoffrey is the executive director of the Victoria Jewish Community Council. His uncle Willy is the partner of singer Deborah Conway.

"It's still just too painful for us to speak about at the moment," Geoffrey said from his home in Malvern.

"We understand the interest, but we've decided not to talk to anyone, not at the moment. I'm sorry."

His son, whose other names included Ben Alon in Israel and Ben Allen on his Australian passport, was buried in Melbourne's Jewish Chevra Kadisha cemetery in Springvale aged 34.

Shadow foreign minister Julie Bishop called for a full explanation on the "apparent breakdown" within DFAT and whether the Israeli government notified DFAT that an Australian-born man had been imprisoned.

She said she had raised concerns with Israeli Ambassador in Canberra Yuval Rotem, who had promised to pass them on to his government. He was not commenting yesterday.

But the Israeli government continued its gagging of the case, with Prime Minister Benjamin Netanyahu's office yesterday summoning Israeli newspaper editors to ask them not to publish a story "that is very embarrassing to a certain government agency", Israel's Haaretz newspaper said before censoring its own stories.

One of the Zygier family's neighbours said Ben was fluent in Hebrew and dux of Bialik College.

"I would talk to him in Hebrew as he was fluent in the language," she said.

"He was a very helpful guy, always happy and smiling. He was the dux of his college, went to Monash University to study law and became a successful lawyer.

"He moved in when his grandparents went to an aged care facility. Then when he moved to Israel, his sister Tully, moved in. But she was only here 12 months and then diagnosed with MS and had to move back in with her parents.

"The family stayed in his former home for seven days, as is tradition, after they buried him and now they rent it out.

"His family were devastated when he died."

Willy Zygier said he had "no idea what is true, what isn't true" and Ben's parents were still in mourning.

"All I know is there's a family tragedy. Every suicide is a tragedy," Willy said.

"Ben's parents are in mourning. I don't know if they'll talk."