The Conservative government has been dealt a major setback in its attempt to limit what a military watchdog puts in his final report on the handling of Afghanistan prisoners.

A Federal Court has dismissed an application that would, among other things, strike the testimony of diplomat-whistleblower Richard Colvin and block thousands of pages of documents from being used by the Military Police Complaints Commission.

The agency held public hearings into the question of whether military cops in Kandahar knew â€“ or should have known â€“ about the alleged abuse of suspected Taliban prisoners by Afghan jailers.

Justice Department lawyers argued the commission had no authority to call witnesses, such as Colvin, who said he repeatedly warned both Foreign Affairs and the military about possible prison abuse.

In dismissing the court challenge, Justice Yves de Montigny said the government has no basis to speculate on what will be in the commission's final report and points out that it will be vetted internally at the Defence Department before it's released publicly.