The Department of Home Affairs has admitted it did not seek any advice from experts in Fijian law before cancelling the citizenship of terrorist Neil Prakash.
Home Affairs Minister Peter Dutton announced late last year that Prakash was being stripped of his Australian citizenship.
The Australian-born Islamic State recruiter is awaiting trial in Turkey on terror charges.
Mr Dutton justified the decision based on advice from his department that Prakash was entitled to Fijian citizenship.
But Fijian immigration officials are adamant Prakash - who was born in Melbourne to a Fijian father - has never held or sought citizenship of their country.
Home Affairs official Linda Geddes has confirmed the department did not obtain any advice from experts in Fijian citizenship law before Mr Dutton made the announcement on December 29.
Ms Geddes also conceded the Australian government did not take any steps to verify Prakash's citizenship with Fijian authorities.
Senior Counsel Ian Dean says he provided 'strong' legal advice that Prakash was a dual citizen. Source: AAP
Special counsel Ian Deane, who the government relied on to make its decision, said he provided strong advice Prakash was a citizen of Fiji.
Department officials refused to release his advice but did not concede it was incorrect.
Shadow attorney-general Mark Dreyfus led questioning of the officials during a hearing of parliament's intelligence committee in Canberra on Wednesday.
The committee was investigating proposed laws aimed at making it easier to strip citizenship from homegrown extremists.
Mr Dreyfus said the department had made a hash of the Prakash situation.
"The more we learn about Dutton's mishandling of Neil Prakash's citizenship, the worse it gets," he told AAP.
Mr Dreyfus said Labor supported stripping Australian citizenship from extremists with dual nationalities.
"But it appears Neil Prakash is still a citizen and the whole process has been stuffed up by Peter Dutton," he said.
"How can he be trusted to administer this Act - or any future legislation related to it - without making another serious mistake like this one, and putting Australia's national security at risk?"
Mr Dutton has been contacted for comment.
