They were the failed negotiations which have left a cache of missile launchers in unknown hands – and Australia in a state of limbo.

Four years ago, tentative talks began between counter-terrorism officials and legal representatives of several convicted terrorists over the whereabouts of at least five rocket launchers stolen from a military facility early last decade and now believed to be buried in bushland on Sydney's fringes.

Now, for the first time, sources have opened up on the secretive meetings, with both sides blaming the other for negotiations having faltered almost as quickly as they began.

A senior national police source, who has spoken on the condition of anonymity, said: "We were happy to commit to paper and do something if they produced the rocket launchers, or evidence of them. But everyone wanted everything upfront, whether that be money, deals on sentences they were either about to get or had received. It doesn't happen like that."