America's disregard for Canberra's pleas about Mr Habib came despite the fact that Australian troops were fighting alongside the US in Afghanistan at the time, and preparing to help the US in the invasion of Iraq. Mr O'Sullivan said Australian officials in Pakistan formed the view on October 22, 2001, that Mr Habib might be "rendered" — transferred to a third country for interrogation — and conveyed concerns to Canberra.

A meeting in Canberra the next day — attended by then ASIO director-general Denis Richardson and senior representatives of the Federal Police and three government departments — decided that Australia would oppose his rendition. He said Mr Richardson conveyed Australia's position to the US State Department and the US intelligence community. "The former director-general made plain on a number of occasions to the American authorities the Australian Government's position. And that was in October of 2001, that was in November 2001 and subsequently." Mr O'Sullivan's evidence suggests the US practice of rendition and its use of torture was known at senior levels of the Australian Government three weeks after the invasion of Afghanistan on October 7.

He told the hearing he believed this was why Australia opposed Mr Habib's rendition. "My assumption is that it was because of long-standing Australian policy going back over decades that Australia does not support torture and so we would not support a position where one of our citizens was put in such a position," Mr O'Sullivan said.

Mr O'Sullivan confirmed the outcome of the officials' meeting was communicated through senior levels of government on a "need-to-know" basis. "Such intelligence material would routinely be distributed to the prime minister's office — to whomever the staffer in the prime minister's office who is charged with handling such material," he said. Mr O'Sullivan said ASIO interviewed Mr Habib in Pakistan on October 24, 26, and 29 before he was sent to Egypt without Australia's consent. For months after Mr Habib's rendition, Australia was unable to confirm from either the Egyptians or the Americans where he was. Mr O'Sullivan said that by November 2001, ASIO thought it was likely Mr Habib was in Egypt. By February 2002, it was almost certain he was held there.

Mr Habib was transferred to Guantanamo Bay, Cuba, in May 2002, and held there for almost three years before being released without charge in early 2005. He said later that his interrogators in Egypt had beaten his feet and used an electric cattle prod to torture him. He said he also saw a man beaten to death in front of him and was warned the same could happen to him.

Last night, an angry Mr Habib told The Age he did not believe Mr O'Sullivan's version of events. He said he was convinced Australian authorities supported the US plan to render him to Cairo. "What did they do to stop it?" Mr Habib said. "I know Australia had a hand in my rendition to Egypt." Mr Habib said that in Egypt he was interrogated by a man he knew to be an agent contracted to an Australian intelligence agency. He knew the names of Australian agents operating from the Australian embassy in Cairo but he would be breaking the law if he made that information public. Mr Habib said the Howard government only asked for him to be moved when the media found out where he was.

Greens senator Kerry Nettle said yesterday's hearing revealed that three other agencies at the October 23 meeting — the Federal Police, the Attorney-General's Department and the Prime Minister's Department — did nothing to stop Mr Habib's rendition. "It's damning. If you don't actively ensure that it doesn't happen, then you are ensuring that it does," she told The Age. With BRENDAN NICHOLSON