In 2009, Australian Security Intelligence Organisation dropped Monis from its "terror watch list", despite the gunman having come to its attention in 2008 for writing hate mail to the families of killed Afghanistan diggers.

But in news which raises questions about the integrity of domestic terrorism monitoring, Fairfax Media can reveal that same year the Australian Federal Police received a report which showed Monis' behaviour had escalated from insults to threats against a Muslim leader for associating with Jews, among other things.

Monis repeatedly harassed and threatened Osman Karolia, then principal of the Islamic Arkana College in Kingsgrove, because he believed Mr Karolia was a "sell-out" to Islam for his friendliness with "infidels", who he referred to by the Arabic word "kafir".

Monis, who fashioned himself as a sheikh, appeared to be motivated by a hardline Islamic ideology. He objected to Mr Karolia's fostering of an inter-school friendship with the Jewish Mount Sinai College, and that the principal organised an inter-faith Anzac Day ceremony for his students.

"In 2009, I got a series of faxes reminding me that I should not adopt the ways of the non-Muslim and be a traitor and a sell-out," Mr Karolia said.

"[Monis] was particularly upset that I was hosting an Anzac Day ceremony. I also established links with a Jewish school. He had no connection with [Arkana College]. Possibly he was reading about our activities on the website at the time."

Monis, who signed his threats as "Sheikh Haron", continued to send menacing faxes, about a dozen in total, Mr Karolia said. The school principal responded to the first fax, explaining to the gunman that "the broader Australian values are consistent with Muslim values".

"Then I ignored him until one day he sent a threat: 'People like you will get what's coming your way'."

"I wrote back: 'Is that a threat?' Foolishly he took the bait and said, 'Yes' and also some other words about me not being a proper Muslim."

Mr Karolia says he then reported the matter to an Australian Federal Police officer who was part of a schools liaison unit based in Sydney. Fairfax Media has chosen not to name the officer. The AFP said in a statement it "has previously been aware of Mr Man Haron Monis" but would not comment on whether the 2009 threat was passed on to federal security agencies including ASIO.

"They told me they would look into it immediately. The contact stopped, so I assumed they had a word with him," Mr Karolia said.

But the complaint did not prompt federal authorities to keep Monis on the terror watch list. In the days following the Sydney siege, Prime Minister Tony Abbott said Monis dropped off that list in "about 2009". Mr Karolia's complaint was made in mid-2009, well before Monis was charged in 2013 and 2014 for being an accessory to his ex-wife's murder and for a string of alleged sexual assaults.

"I don't know why he dropped off the watch list in those days, I really don't," Prime Minister Tony Abbott told reporters.

On December 18 Attorney-General George Brandis said: "What ... appears to have been an ASIO investigation which was current in about 2008 and 2009 was discontinued in, so it is said, around 2009."

Since the Sydney siege there has been public debate over whether or not Monis was a "true" terrorist motivated by an extreme Islamic agenda. The revelation throws light on Monis' political and religious motivations as far back as 2009.

In December, Mr Abbott was asked on Channel Nine about the revelation that the national security hotline was tipped off about Monis' extremism just days before the siege.

Mr Abbott said officials did look at Monis' website but  "because there was no evidence of an actual threat of violence by this man at this time, I regret to say that no further action was taken".

Mr Karolia, now the deputy principal of Unity Grammar College and the secretary of the Islamic Schools Association, said he regarded Monis as a "lunatic" with the sort of extreme beliefs which could serve to radicalise his own students.

"Man Monis at the time was a headache because he represented the attitudes and embodied the type of opinions we didn't want our students to adopt," he said.

A joint Commonwealth-NSW inquiry is being undertaken into the Sydney siege.