The testimony of possible foreign spy and actions of a corrupt NSW police officer will be probed as part of an inquiry into the 1981 terror plot convictions of a group known as the "Croatian Six".
The judicial inquiry, which began on Monday, will examine the possibility Crown witness Vico Virkez might have been working for Yugoslavian intelligence services when he testified the group was involved in a bomb plot.
It will examine the actions of police, including those of disgraced officer Roger Rogerson, who helped lead the arrests of the men.
Rogerson, who is serving a life sentence for murder, could be called to answer questions about his involvement in the case.
The Croatian Six are Maksimilian Bebic, Mile Nekic, Vjekoslav Brajkovic, Anton Zvirotic and brothers Ilija and Joseph Kokotovic.
On February 8, 1979 Mr Virkez told police in Lithgow about a Croatian nationalist plot involving the group he said was planning to blow up several Sydney sites with timed explosives the following day.
His statement prompted a series of raids, with police giving evidence they found explosives and detonators in Mr Virkez's black 1963 Valiant, which he said belonged to his roommate Bebic.
Mr Virkez told police it was Zvirotic and Brajkovic's idea to place the bombs with their motivation "to keep fighting for our country".
During his trial, Bebic said he was assaulted by police on the night of the arrest, with a pistol placed in his mouth as he was asked: "Where are the bombs?".
Several of the group denied having made confessions attributed to them by police and reported being threatened and beaten during interviews.
Despite the claims, the Croatian Six were convicted in February 1981 of a conspiracy to bomb two Sydney travel agencies, a Serbian social club, the Elizabethan Theatre in Newtown and the city's water supply pipes.
They were each sentenced to 15 years' imprisonment from February 8, 1979, while no non-parole period was set.
The men were released after serving seven or eight years of their sentences, although it was not clear when or why this occurred, according to an earlier judgment ordering the inquiry.
The credibility of Mr Virkez was challenged during the trial, with lawyers for the accused arguing he was an agent of Yugoslavian intelligence service the UDBA and had a motive to lie.
In the decades after the trial, he told journalists he was a member of an Australian cell of Serbian terrorist group the Black Hand and he had infiltrated Croatian terrorist and political groups in the 1970s.
"Virkez's evidence was a critical component of the Crown case against the six men," counsel assisting the inquiry Trish McDonald SC told Monday's hearing.
"The other key components of the Crown case were evidence given by police officers of confessions made by the accused ... (and) about explosives and other material located at the homes of the accused men and evidence about the involvement of the accused in the Croatian national movement."
The inquiry continues on Tuesday.
Australian Associated Press