Police and security agencies would be allowed to search the homes and computers of suspects without their knowledge and intercept communications, under legislation to go before Parliament next week, reports the Sydney Morning Herald.

The extensive powers - which also give federal police the right to assume false identities to conduct the surreptitious searches, seize equipment and plant listening devices without an interceptions warrant - come amid growing concerns about counter-terrorism powers following the bungled handling of the terrorism case against an Indian doctor last week.

Senator Kerry Nettle of the opposition Greens party said an inquiry was needed into the handling of the case against Dr Mohammed Haneef before police were given new powers.

'Now is not the time to be proposing extensive new powers for the Australian federal police,' she said.

Dr Haneef was held in Australia for more than three weeks and charged with providing support to a terror group in connection with June's failed car bombings in London and Glasgow.

But the case collapsed last week due to a lack of evidence, and Dr Haneef was allowed to fly home to Bangalore.

Meanwhile, dozens of loudspeakers have been installed on the streets of Sydney to tell people what to do in a terrorist attack.

Around 40 speakers should be operational in time for next month's meeting of 21 world leaders at the Asia-Pacific Economic Cooperation summit, said New South Wales state Police Minister David Campbell.

'If there were a terrorist event or a major building fire and there were people in the streets, this is a way of giving them information,' Mr Campbell told the Australian Broadcasting Corporation yesterday.

A wailing siren would attract residents' attention, followed by a police announcement directing people to evacuation points plotted around the downtown area.

The move comes just weeks after Sydney's city council urged locals to prepare survival bags - including maps, first aid supplies, documents, spare change and an extra set of keys - in case of emergency.

Critics accused the council of unnecessarily stoking fear among residents and ridiculed some of the recommended measures - such as packing toilet paper and stuffing pet cats into pillow cases for evacuation.

AGENCE-FRANCE PRESSE, ASSOCIATED PRESS