The Islamic Council of Victoria has pulled out of a meeting with Tony Abbott, citing anger over the prime minister's "Team Australia" comments.
ICV secretary Ghaith Krayem told SBS the council was angered by comments made by Mr Abbott on Macquarie Radio yesterday.
Mr Abbot's comments in the radio interview included "everyone has got to be on team Australia" and "you don't migrate to this country unless you want to join our team".
The Prime Minister was referring to the risks posed by Australians fighting overseas and returning radicalised but Mr Krayem told SBS the statement had broader connotations.
"We're not a migrant community; it shows a complete lack of knowledge about our community," Mr Krayem said.
"We're a religious community; half of our community actually was born in this country, so there’s no place for us to go to."
He said the community had made its voice heard.
“We're Australians like everyone else, and yet once again we have the prime minister saying you need to speak out more,” he said. “Well we've spoken out a lot.”
Despite the Council pulling out, other Muslim leaders who attended the meeting, including Sheikh Isse Musse, described it as candid.
"We have now a different perspective than we had before, because before coming to the meeting we thought that it will be very tense meeting but it wasn't," Sheikh Musse said.
Sheikh Musse denied the Islamic Council's decision not to attend has caused division within the Muslim community.
"I suppose it would be much better if they came along and joined the discussion and made their concerns known as we have done," he said.
Counter-terrorism laws
The proposed law changes include cutting welfare payments for Australians found to have fought for extremist organisations overseas.
The laws would also require anyone visiting certain destinations in civil conflict to justify their travel.
But Australian terrorism experts say the government's plan to cut welfare payments for extremist action is risky and could push vulnerable people into the hands of terror organisations.
Terrorist organisations often use financial support as a lure to attract potential extremists and cutting payments could make those offers more attractive, the experts say.
"It's a very, very risky strategy," Victoria University Professor Michele Grossman told Fairfax.
Monash University professor Greg Barton said cutting welfare payments could erode the trust of the broader Muslim community in the government.
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