Nut Case Spies Creating China Scare: Ex-Aussie PM

Australia's outspoken former prime minister Paul Keating has launched an extraordinary attack on the country's tops spies, branding them "nutters" who had gone "berko" over the threat from China.

Just weeks before a national election, the opposition Labor Party was on Monday forced to distance itself from its former talisman's comments.

Keating – who was prime minister for five years until 1996 – told national broadcaster ABC on Sunday that the Australian Security Intelligence Organisation and the Australian Secret Intelligence Service had "lost their strategic bearings".

"The nutters are in charge," Keating claimed, criticising their suspicions of China.

"Whatever you think, China is a great state. It's always been a great state and now has the second-largest economy, soon the largest economy in the world," he said.

Keating – who has worked as an adviser to the state-backed China Development Bank – said the spies had "all gone berko."

Liberal Prime Minister Scott Morrison leapt on the comments, hoping it could help him claw back some ground in the polls ahead of the May 18 vote.

"Our security agencies have prevented 15 terrorist attacks in Australia," he said on Monday.

"For "a 'Labor legend' to go out there and attack the credibility of our security agencies that have been saving lives in this country, I think is very disappointing."

The latest Ipsos poll shows Labor on 52 percent and the Liberals on 48 percent in a head-to-head race, a slight narrowing of the race.

Opposition leader Bill Shorten distanced himself from Keating's remarks.

"I don't share those concerns," he said.

"Paul Keating's an elder statesman of Australian politics ... He's never been shy of saying what he thinks," Shorten said.

"But for myself and for my opposition team, we've worked very well with the national security agencies. They know that and we know that." (AFP)