A federal cabinet minister says police are right to immediately act against would-be terrorists even if charges are later dropped in court.
Harun Causevic was the first Victorian to be held under a preventative detention order when he was detained without charge following counter-terrorism raids in April.
The 18-year-old Melbourne man spent 127 days in 23-hour isolation.
However, prosecutors told the Melbourne Magistrates Court on Tuesday that terrorism-related charges had been dropped.
Causevic's lawyer Rob Stary described the episode as a "terrible injustice".
Immigration Minister Peter Dutton on Thursday said such cases were frustrating but worth pursuing by police.
"If they were investigating an assault or even a murder they would have months of investigation, they would gather all the evidence together and they would arrest the person when they had sufficient evidence," he told 2GB Radio.
"When it comes to a terrorist attack the police and intelligence agencies have to strike before that person can take out literally dozens or hundreds of people.
"The upside is you stop the carnage. The downside is you sacrifice the gathering of evidence that would sacrifice a conviction in court."
Mr Dutton said it also underlined the need for new citizenship laws to be passed in the next sitting of parliament.
"If you want to try and blow Australians up, if you are a dual citizen you shouldn't retain your Australian citizenship, you should lose it," he said.
The parliamentary committee looking into the laws will report next Wednesday.
If enacted, the bill would enable a dual citizen to lose their Australian citizenship if their conduct is "incompatible with the safety and shared values of the Australian community".
Labor and lawyer groups have argued that without extra checks and balances the laws may not survive a High Court challenge.
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