Justice David Mossop wondered what would become of what he once called "the spooky material" as the ACT Supreme Court case of Bernard Collaery, 77, was formally terminated on a day described by a human rights lawyer as "a truly momentous occasion".

New federal Attorney-General Mark Dreyfus QC intervened in the long-running legal saga of Mr Collaery on Thursday, exercising powers that allowed him to decline to proceed with the protracted prosecution of the Canberra lawyer and former territory politician.

Mr Collaery had been due to stand trial in October after years preparing to defend himself against four charges of unlawfully communicating classified information in media interviews, plus a single conspiracy allegation.

The first four charges concerned the public exposure of a 2004 espionage operation in which Australian spies bugged a government building in East Timor during negotiations to carve up lucrative oil and gas reserves in the Timor Sea.

The other related to claims Mr Collaery had illegally plotted with his former client, the ex-Australian Secret Intelligence Service spy known as Witness K, to reveal the under-handed operation to East Timor.

Mr Dreyfus' move to end the proceedings, widely panned as "a political prosecution" authorised by the former Coalition government, has been met with widespread praise.

Those commending the decision include former East Timor president Xanana Gusmao, who, along with other prominent people like former NSW judge Anthony Whealy QC and ex-foreign minister Gareth Evans, gave evidence for Mr Collaery during pre-trial hearings.

"The bugging of Timor-Leste's cabinet room, which was undertaken for commercial purposes, was illegal and unconscionable," Mr Gusmao said on Thursday night.

"The Timorese people are grateful for the courage shown by Mr Collaery and supported the stand that he took in this matter.

"Mr Collaery and his client, Witness K, are greatly respected in Timor-Leste."

When Mr Collaery's matter was briefly mentioned in court on Friday morning, Justice Mossop formally vacated the trial and associated Supreme Court proceedings.

Mr Collaery is currently in France and did not attend, but so many members of his pro bono legal team attended that some had to sit in seats usually reserved for defendants.

Defence barrister Christopher Ward SC signalled he may apply for Mr Collaery to be awarded costs of various National Security Information Act proceedings, which bogged the case down for years as the previous government pursued secret hearings.

Justice Mossop gave him until next Friday to file any such application.

Perry Herzfeld SC, counsel for Mr Dreyfus, told Justice Mossop the parties still needed to discuss what to do about the range of classified materials currently stored by the court.

Former attorneys-general Christian Porter and Michaelia Cash had placed so called court-only evidence, apparently so secret not even Mr Collaery or his lawyers were able to see it, before Justice Mossop for the purpose of determining how open the case should be.

Late last year, Justice Mossop dubbed this "the spooky material".

On Friday, Mr Herzfeld said he thought that material and other classified information, some of which was available to the defence, should be retrieved by those who had provided it "so the court is no longer responsible for its custody".

Justice Mossop indicated he wanted it gone.

"The prospect of the court securely keeping that forever is not attractive," he said.

Those in the court's public gallery included Kieran Pender, from the Human Rights Law Centre, who described the formal ending of the case as "a truly momentous occasion".

"At long last, after four years, more than a dozen court judgements, over 50 court hearings and millions of dollars in legal fees, the prosecution of Bernard Collaery is over," he said.

"Australia is a better place because this unjust prosecution of a brave whistleblower has finally been dropped."

MORE COURT AND CRIME NEWS:

Attention will now turn to potential legislative reforms to protect whistleblowers.

Mr Dreyfus' intervention comes too late for Witness K, who was sentenced last year to a suspended three-month jail term after he pleaded guilty to a conspiracy charge.

The Attorney-General now faces calls to banish the prosecutions of former army lawyer David McBride, who exposed war crimes in Afghanistan, and ex-Australian Taxation Office staffer Richard Boyle, who blew the whistle on aggressive debt recovery practices targeting small businesses.

Mr Pender said those men were "on trial for speaking up about wrongdoing".

"Both cases are similarly exceptional and warrant intervention from the federal government," he said.

"Whistleblowing law reform and the establishment of a whistleblower protection commissioner must be top priorities, to ensure a travesty like this can never happen again.

"Whistleblowers should be protected, not punished."

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: