Proposed new legislation in Australia could force priests, and potentially any Catholic involved in advocacy, to register as a 'foreign agent' of the Vatican, bishops have warned.

'Catholics are followers of Jesus Christ, we are not agents of a foreign government,' Bishop Robert McGuckin of Toowoomba told a parliamentary committee.

The row comes after Malcolm Turnbull, Australia's prime minister, last month introduced a crackdown on foreign political donations and lobbying following growing concerns about interference by outside states, especially China.

A scandal involving an MP who made a pro-China speech after receiving a donation from a Chinese property tycoon has been among revelations in Australia.

The proposed bill would require those who act for foreign powers to reveal their status on a new register, or face criminal charges.

Although it contains an exemption for religious groups, the draft bill also states that the Catholic Church is affiliated with the Vatican, which could leave priests and individual Catholics exposed to the claim they are foreign agents.

Bishop McGuckin said: 'I want to be clear in rejecting the characterisation of the Catholic Church found in the explanatory memorandum.

'It seems that every Catholic involved in advocacy may need to register and report...We don't believe that is the intention of the bill.'

The Australian Catholic Bishops Conference had written to the committee, stating that the bill was 'drafted on the incorrect belief' that the Australian Church acted on behalf of the Vatican.

A Liberal MP, Andrew Hastie, the head of Australia's parliament's intelligence and security committee, said that according to security services, the country was 'experiencing unprecedented levels of espionage and foreign interference'.

After new laws against espionage were introduced last year, Castle said that he was 'not convinced there is a need' for more, but that the new legislation was 'seeking to protect Australia and its interests'.

The attorney-general, Christian Porter, declined to comment on specific responses to the bill, saying: 'They are important, but they are made in the context of the critical process of modernising the law to make Australia a safer place and I will be considering all the submissions with great care.'

The Catholic Church in Australia is in crisis over cases of sexual abuse which have been highlighted by a Royal Commission over the past five years.