The auction of an Islamic State flag has prompted Prime Minister Tony Abbott to warn that anyone working with terrorist organisations will be dealt with severely.
The black "Shahada" flag was sold by a mosque in Sydney's southwest during a fundraiser, sparking outrage at what is perceived to be support for the listed terror group.
But the Markaz Imam Ahmad mosque in Liverpool says the flag has been used by Muslims for centuries, and only recently had been adopted by IS militants in Iraq and Syria.
Asked about the auction, Mr Abbott said it was a serious crime under Australian law to work with, fund or fight with terrorist organisations.
"These are serious offences under Australian law, and where there is evidence that Australian law has been broken it will be dealt with severely," he told reporters in Queanbeyan.
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