AUSTRALIAN troops were photographed flying a Nazi flag while on duty in Afghanistan.

The leaked photo, obtained by the ABC, shows the Swastika hoisted over an Australian military vehicle in action in the war-torn country.

According to the ABC, the flag was taken to Afghanistan by a soldier and flown on the vehicle in 2007.

The broadcaster quoted a defence force source as saying the incident was a “twisted joke” rather than an expression of Neo-Nazism.

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Prime Minister Malcolm Turnbull condemned the incident as “completely and utterly unacceptable”.

“It was absolutely wrong and their commanders took action at the time,” he said.

A Defence Force spokesman told the ABC of the incident: “Defence and the ADF reject as abhorrent everything this flag represents. Neither the flag nor its use are in line with Defence values.

“The flag was briefly raised above an Australian Army vehicle in Afghanistan in 2007. The commander took immediate action to have the offensive flag taken down.

“It is totally inappropriate for any ADF vehicle or company to have a flag of this nature. The personnel involved were immediately cautioned at the time and subsequently received further counselling.”

“Additionally, steps were taken to reinforce education and training for all personnel who witnessed the flag.”

The publication of the disturbing photo comes a week after Australian special forces soldiers were accused of war crimes while serving in Afghanistan.

Defence Minister Marise Payne defended the work of special forces in complex and chaotic environments in the wake of the report.

Senator Payne’s comments on Friday followed the publication of allegations raised in a confidential defence inquiry report obtained by Fairfax Media.

The inquiry was told of the unsanctioned and illegal application of violence on operations and disregard for human life. The most disturbing part of the report details an incident in which an Australian special forces soldier allegedly kicked a handcuffed Afghan detainee off a cliff.