Prime Minister Tony Abbott's hope for a united "Team Australia" approach to proposed new terror laws has hit a hurdle with a Muslim group describing them as "more destructive" than the now abandoned changes to the race-hate laws.

On Tuesday the government backed down on its plans to repeal a section of the Racial Discrimination Act which makes it illegal to offend or insult someone on the basis of their ethnicity.

The law was used to successfully prosecute News Corp columnist Andrew Bolt and Mr Abbott pledged to repeal the laws if elected. But the Prime Minister while announcing new counter-terror laws this week said that the debate over Section 18C had become a "complication" in maintaining national unity.

Read the complete original version of this item...