Hundreds of classified files obtained by the ABC have now been secured by the nation's top spy agency, after it was revealed the papers were found in two filing cabinets purchased at an ex-government furniture sale.
The major blunder has revealed the inner workings of five separate governments, sparking fears it will alarm Australia's security and intelligence allies.
"It sends a signal to our intelligence partners and allies that Australia might not be trustworthy when it comes to sharing information and intelligence with us," independent federal MP and former intelligence analyst Andrew Wilkie said.
Labor frontbencher Chris Bowen said the bungle was "comic, but yet unbelievably serious".
The Australian Federal Police (AFP) has disputed a story contained within The Cabinet Files that revealed the agency lost hundreds of national security documents over a five-year period. Cabinet documents obtained by the ABC include a Department of Prime Minister and Cabinet (PM&C) audit that reveals the AFP lost nearly 400 files between 2008 and 2013.
The AFP released a statement this afternoon saying that document was outdated and that 90 per cent of those files had subsequently been located or destroyed.
However, the agency said 33 cabinet documents from that period still remained unaccounted for.
The Cabinet Files revealed former Labor governments also failed to follow document security procedures to the letter. One file revealed hundreds of highly classified documents were left in a locked safe in the office of Labor's Senate leader Penny Wong after the Rudd government's defeat in the 2013 election. Although the 195 files were secured, a list of their names and top-secret classifications give unprecedented insights into the workings of cabinet's National Security Committee.
During the six years the list of documents span, the committee dealt with Middle East defence plans, national security briefs, Afghan war updates, weapons purchases, Chinese interests in the mining industry, intelligence on Australia's neighbours and details of counter-terrorism operations.
Senator Wong said she was never made aware of the matter until she saw the ABC's reporting. She added that she had always taken her responsibilities as a senior minister seriously.
The Department of Prime Minister and Cabinet (PM&C) has launched an urgent investigation, but the Government is being urged to set up a broader inquiry.
"It's not good enough that the department that might be responsible for the blunder is now investigating itself," Mr Wilkie said.
PM&C said it had been working closely with the Australian Federal Police and ASIO since the release of the documents and was "continuously" in discussion with the ABC. In an extraordinary development, ASIO officers took safes to the ABC's Canberra and Brisbane newsrooms to secure the documents, rather than removing the papers from the buildings.
"This was the outcome of a cooperative arrangement between the ABC and the Australian Government — it was not a raid," PM&C stressed in a statement.