The Australian Securities and Investment Commission was revealed on Friday to have accidentally blocked more than 1000 websites in a attempt to stop one site that was operating to defraud people.
The ABC reports the ASIC was using a Section 313 request under the Telecommunications Act, which is supposed to be used by law enforcement agencies like the Australian Federal Police to stop access to illegal websites.
The incident has revealed that government agencies see Section 313 as a way to filter the net, which has reopened debate about how legal or illegal information is blocked or censored online.
The ABC reports there is concern that any state or federal government body can now effectively censor the internet without any oversight or due process.
"There are some pretty big implications from this about how government agencies might use a similar power in the future,'' said Jasmine-Kim Westendorf of the Melbourne Free University website, which was one of those accidentally blocked.