NB - This story was an April Fools' joke.

Internet search giant Google is planning to close down its Australian office in response to the Federal Government's plans to filter the internet, according to an internal memo sighted by iTnews.

According to the leaked memo, Google CEO Eric Schmidt [pictured] canvassed the option in discussions with the US State Department on how to take an appropriate international stance on censorship earlier this month.

"We can't be compromised by the Australian situation," the memo reads. "We pulled out on the Chinese over their filter - it won't go unnoticed if we remain in Australia."

Tensions between the Federal Government and Google escalated on Monday evening, when Communications Minister Stephen Conroy told ABC Radio that the search giant should consider its own privacy policies before criticising those of elected governments.

Conroy said Google's motivations could be summed up in one alleged Schmidt quote: "We love cash!"

The memo canvasses the option of Google moving its handful of local switches and cache kit to New Zealand, mirroring the approach taken in China, where racks were re-located to Hong Kong.

A spokesman for Senator Conroy said his department had not received any communications from Google outside of its official submission to public consultations around the filtering plan and has not received any threats from Google to quit Australia.

"Maybe DFAT has been briefed, I don't know," the spokesman for Senator Conroy said. "Ask them?"

Colin Jacobs, vice-chair of Electronic Frontiers Australia said Google had made the "wrong move."

"After being assured by the Minister that the filter is benign and for our own good, EFA recently reversed its opposition to the plan," he said.

"Google's decision not to play by Australian law leaves Australians at continued risk of being bombarded by unspeakable obscenity every time they open their web browser, with nobody to help shield them. We can't help but wonder if this means Google is somehow pro-bestiality."

Representatives from Google were too busy enjoying April Fools Day!!! to make comment.

iTnews wishes all its readers a Happy April Fools Day.