The $50,000 industrial steam cleaner the Home Affairs department bought at taxpayers' expense to clean mouldy facilities at the Nauru detention centre was too dangerous to use.
A former detention centre worker characterised the machine's purchase as a "comedy of errors".
"It was too big, too bulky, you couldn't get it down into the camps, besides the fact that it was dangerous as anything," the source said.
"It was a giant water blaster and if you used it inside the (asylum seeker) tents it was ripping the plywood floors up."
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The source said the machine arrived after Transfield had already come up with a new plan to remediate the mould with tea tree oil.
The machine has only been used by mechanics to clean the mud off the bottom of buses before they are serviced, the source said.
The department and then centre operator Transfield (now Broadspectrum) were warned about mould health risks to asylum seekers and staff in a top-secret 2014 report by microbiologist Dr Cameron Jones, AAP revealed last week.
At least 20 former detention centre staff have become seriously ill from mould exposure, including an Australian teacher who now has a cognitive disability.
Officials said the first time the department became aware of reports of mould-related illnesses among former detention staff was via media articles.
Department official David Nockels defended the efforts to tackle the mould.
"We purchased significantly large... industrial-sized equipment... a massive steam cleaner at the cost of $50,000," Mr Nockels told a Senate estimates hearing in Canberra on Monday night.
He later admitted he didn't know what the machine did because he hadn't seen it in action.
Government backbencher Ian Macdonald responded: "You are kidding."
"Do you or anyone else in Canberra know that anywhere you live in tropical Australia... that mould is a natural part of life, it's constant, people don't get sick from it," Senator Macdonald said.
"Do you know if the government is about to provide a $50,000 machine to help every resident of Babinda, Tully, Mission Beach, Innisfail, Daintree? ... I can't believe the department falls for this agitation."
Dr Jones said a steam cleaning machine would only be suitable for tackling mould on non-porous areas such as tiles and grout and window sills.
"There is no logical way steam cleaning could be realistically applied to the tent materials inside or out," he told AAP.
