The former head of Australia's spy agency ASIO, Dennis Richardson, was told numerous times by foreign government officials that a plan had been hatched to take former Guantanamo Bay detainee, Mamdouh Habib, to Egypt for interviewing, before the father of four suddenly disappeared from a Pakistani jail.

But Mr Richardson did not ''take sufficient action'' to advise Australian government ministers that there was an urgent need to escalate Australia's objections to his rendition, a new report has found.

Mr Richardson, who is now the secretary of the Department of Foreign Affairs, is also criticised by the intelligence agency watchdog for a lack of appropriate record keeping during what was an unprecedented incident involving an Australian citizen being detained overseas on suspected terrorism charges.

The criticisms are contained in report by the Inspector-General of Intelligence and Security Services, Vivienne Thom, into the actions of Australian government agencies in relation to the arrest and detention overseas of Mr Habib.

The wide-ranging report was commissioned by Prime Minister Julia Gillard in December 2010 after Mr Habib made allegations that Australian officials had been present during his interrogation and torture in an Egyptian jail.

Mr Habib was arrested in Pakistan in the aftermath of the terrorist attacks of September 11, 2001. Despite being visited by ASIO and Australian Federal Police agents while in custody in Islamabad, he was secretly taken by the CIA to Egypt, where he was tortured for seven months before he was imprisoned at Guantanamo Bay. He was held there until January 2005, when he was released without charge. On his return, he launched legal action against the Australian government, claiming it was complicit in his rendition and torture. After a six-year battle, the Gillard government agreed to pay him an undisclosed sum subject to strict confidentiality to drop his lawsuit.

The unclassified version of the report by Dr Thom, which was released yesterday by Ms Gillard, makes six recommendations including that the Department of Foreign Affairs, ASIO, and the Australian Federal Police amend its policies regarding the treatment of Australian citizens detained overseas.

Ms Gillard has agreed to adopt five of the six recommendations but has refused to agree to apologise to Mr Habib's wife, Maha, for failing to keep her properly informed about his welfare and circumstances.

Greens leader Bob Brown said yesterday said the government should apologise.

''This would be a small gesture given the suffering Mr Habib and his family have gone through,'' Senator Brown said.

In the report, which took a year to complete, Dr Thom said the Department of Foreign Affairs had failed in its duties to offer consular assistance as was possible after Mr Habib was arrested in Pakistan in October 2001.

She also backed Mr Habib's claims that information seized during an ASIO raid in Sydney was passed to Egyptian authorities to be used during his interrogation.

Mr Habib said yesterday he intended to reopen his case against the government and ''take it to an international court''. But Ms Gillard said the report showed no Australian official was found to be involved or complicit in any alleged mistreatment or relocation of Mr Habib while he was detained overseas. ''However, the report also makes clear that some whole-of-government mechanisms and processes could have worked better,'' she said.

She said new policies would improve communication between authorities and individuals overseas and provide guidelines to mitigate the risk of inhumane or cruel treatment.