The Prime Minister has said he can understand that people are "aghast" at the decision to grant bail to Khodr Moustafa Taha, who has been accused of threatening police and using social media to support terrorist group Islamic State.

"This is someone who appears to have a history of violence, a commitment to extremism and he has made explicit threats against the police," the Prime Minister told Fairfax Radio on Wednesday.

"It does seem a very, very questionable bit of judicial judgment – injudicious judgment by the judiciary. That's how it seems to me."

Mr Abbott's attack is not supported by an examination of the case by the Victorian Office Of Public Prosecutions and has been criticised by the Law Institute of Victoria and the Human Rights Law Centre.

While Victoria Police asked the Victorian Office of Public Prosecutions to consider an appeal against the decision by Deputy Chief Magistrate Jelena Popovic, the office has rejected the request after reviewing the case.

"The Director (of public prosecutions) has carefully considered this request for an appeal, and has concluded that an appeal pursuant to Section 18A Bail Act 1977 should not be brought," a spokesperson for the office told Fairfax Media.

"From the available material, we do not detect any clear error, or error that can be inferred, or miscarriage of approach in the way the magistrate approached this case," the spokesperson said.

Ms Popovic made the bail decision last week, saying the conditions imposed would reduce any risk.

The matter will return to her on 22 January 2015, when the OPP says the question of bail "can be re-ventilated then if necessary".

While not commenting on the case, the State Attorney-General, Martin Pakula, has asked the Department of Justice  to examine if there are any "gaps" in the state's bail laws.

The president of the Law Institute of Victoria, Katie Miller, described Mr Abbott's remarks as "unhelpful", saying it was well-established that it was not appropriate for politicians to comment on cases still before the courts.

"We are talking about the integrity of the court system and its processes and magistrates need to make decisions based on the evidence before them and not on political comments that might be made through the media," Ms Miller told Fairfax Media.

"That's not just about fairness to the accused. It's also about ensuring that the public has confidence in the court processes and that they are independent from government."

While Ms Miller said she had every confidence that magistrates made decisions based on the facts before them and without regard to political commentary, she added: "What these unhelpful comments do is raise the question in the minds of the public of whether a magistrate is going to make a decision based on fear of possible criticism from a politician."

Hugh de Kretser, the executive director of the Human Rights Law Centre, said Mr Abbott's comments went "too far", adding that it was open to the prosecution to appeal if they felt a magistrate had erred.

"These comments aren't isolated. The government is criticising the courts for decisions it doesn't like," Mr de Kretser said.

"It's attacking the Australian Human Rights Commission for doing its job and has slashed its funding. It's cut the funds of NGOs that criticise it and changed funding agreements to make it harder for NGOs to speak out."

Mr Abbott said in the radio interview that he accepted the doctrine of the separation of powers, "but you really want to see a bit of common sense on the bench". The case is back before Ms Popovic next week.

Tensions between the judiciary and the federal government last flared in 2002, when the then chief justice of the Federal Court, Michael Black, effectively accused then immigration minister Philip Ruddock of intruding on judicial independence and trying to pressure the court over appeals by asylum seekers.