The un-named 47-year-old Iranian refugee was told his daughter had been taken shopping while he was in solitary confinement at the Baxter detention centre in South Australia in 2003, Fairfax newspapers said on Friday.
Instead, she was secretly returned to her mother in Iran, despite the department obtaining legal advice that said the father was the girl's legal guardian, Fairfax said.
The girl had been in detention with her father since he fled persecution in Iran and they arrived in Australia by boat in 2001.
In a report tabled in federal parliament, commonwealth ombudsman John McMillan said the department deceived the man, had acted contrary to its own legal advice and may have breached its obligations under the Convention on the Rights of the Child.
The man went on a hunger strike for at least 19 days after he learned his daughter had been sent to Iran and later cut his wrists with a razor blade, Fairfax said.
Immigration Minister Chris Evans said he had asked the department to provide advice on compensation.
"To lock up a four-year-old child in a desert detention centre for more than two years is unacceptable," he said.
"To then remove her from Australia without her father's knowledge while he was locked in solitary confinement is inexcusable."
The man has since been granted a permanent protection visa.
15 May 2009
It is only one story of MANY that has made it out.
This is politics at its finest, an example of how the break up of the family unit is a priority.
Everyone involved KNEW what they were doing was wrong AND illegal.
From the 40's onwards the Australian Government would split up families, husband to one camp and wife to the other.
This kind of practice has been going on for AGES, it is NOT allowed to be brought to the surface by media bosses.
Another example of the Stolen Generations campaign.