Foreign Minister Bob Carr said Wednesday an Australian lawyer and three others held in Libya were entitled to immunity, but admitted the chances of their early release appeared slim.
Melinda Taylor was detained late last week after she met with Seif al-Islam, the son of the slain Moamer Kadhafi, as part of a four-person team from the International Criminal Court (ICC).
They were there to help the detained Seif, 39, choose a defence lawyer. The Hague-based ICC wants to try him for crimes against humanity.
But Libyan officials have alleged Taylor was carrying a pen camera and attempting to give Seif a coded letter from his former right-hand man Mohammed Ismail, who is on the run.
An international delegation was eventually allowed to visit the four on Tuesday in the hill town of Zintan, and Carr said Australia's ambassador to Libya David Ritchie spent 90 minutes with them.
"The ambassador examined the conditions of the prison and reported they were generally adequate," he said in a statement.
"He said Ms Taylor appeared to be well and in reasonable spirits given the circumstances.
"As a representative of the ICC, Ms Taylor and her colleagues were doing the important work of the court and are entitled to immunity," Carr added, urging their early release.
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"The Libyans are attaching a very great importance to this case," he said, adding that the four were being held "under guard, they're under duress".
"The disturbing part of his (Ritchie's) report is that there's no evidence of a Libyan interest in an early release.
"Indeed, there's the suggestion that they might be seeking to hold the detainees for 45 days which they have said is the time they need for these sorts of investigations."
The delegation, which included the ambassadors of Australia, Lebanon, Russia and Spain, were initially denied access to the four, but were eventually allowed in after the defence ministry sent documentation in support of the visit.
On Tuesday, Libyan government spokesman Mohammed al-Harizi told the ABC that Taylor would be freed if she gave them information on Ismail.
"We want this guy. It is very important to catch this guy because this guy is very, very, very danger(ous) for us," he said, and claimed Taylor had met with Ismail, given that she had a letter from him.
Carr refused to be drawn on the allegations.
"I don't want to canvass that sort of material. I don't want to enter an argument," he said.
"I'm very conscious that we've got an Australian woman in detention and that we need to maintain a reasonable dialogue with the Libyan government because we want her to be able to enjoy access to her family and decent conditions."