KUALA LUMPUR, MALAYSIA - The Internet, compared with the madrasah, is more of a breeding and recruiting ground for terrorist organisations like al-Qaeda and Jemaah Islamiah (JI), Australia's top counter-terrorism envoy said yesterday.

William Paterson said the World Wide Web, along with unregulated education in the rural areas of some countries, is the heart of transmission for terrorist ideologies and franchises.

More troubling is that governments have yet to figure out a way to combat or purge this hi-tech approach to spreading terror.

He was speaking at a roundtable discussion of 50 people organised by the Southeast Asia Regional Centre for Counter-Terrorism (SEARCCT) and the Australian High Commission at the Institute of Diplomacy and Foreign Relations.

The proliferation of extremist websites is a huge challenge to governments because the Internet is accessible, low-cost, immediate, portable, unregulated and global - all highly useful features for terrorist organisations.

Paterson said the Internet becomes their propaganda and recruitment tool, a data source and means to transfer knowledge such as bomb-making, a fund raising tool, as well as a means for transferring funds and for operational planning.

Smaller-scale technologies like these are more effective than powerful weaponry which is harder to acquire and manage, he said.

Paterson cited the Mumbai terrorist attacks as an example of how off-the-shelf, purchasable technology was used to devastating effect.

"We saw the terrorists using GPS, Google Earth, Voice Over Internet Protocol (VOIP), Twitter, mobile phones, commercially available encryption devices and remote control triggers.

"Any of us can go into a shop and buy these things," he said, warning that it was a pattern likely to be replicated.

At a press conference later, Paterson admitted there isn't a solution to the Internet problem at the moment.

Setting up websites with counter messages or getting professional hackers to disrupt extremist websites are not particularly effective.

"If we start down the road of censorship of the Internet, we'll be the big losers.

"People want a free and open Internet.

"Unfortunately, a free and open Internet does mean that those who want to put up extremist websites, can do so," he said.

Nevertheless, Paterson was cautiously optimistic about the progress in the battle against terrorism.

He said al-Qaeda is now on the back foot and preoccupied with its own survival.

"It's outlook is bleak but not yet terminal," he said, conceding that the movement is still durable and has the capacity to regenerate.

He highlighted Southeast Asia as an example of a success story for counter-terrorism operations.

Paterson said JI, along with some of its splinter bodies in Indonesia, "has been significantly dismembered".

But with key JI members still at large, he admitted that the organisation's capability to cause and spread terror has not yet been eliminated.