Japanese Australians worry their children will be bullied, as they say youngsters have been in the United States. Turkish Australians say they will become the targets of racial hatred.

The provocation, they say, will be the erection of monuments to commemorate alleged war crimes or atrocities by their Turkish and Japanese forebears. Dredging up these historical events, which they say are highly contentious and even fabricated, will serve only the agendas of anti-Turkish and anti-Japanese lobbyists and jeopardise the racial harmony achieved in NSW, where 45 per cent of the population was either born overseas or has at least one parent born overseas.

Last October the Australian Turkish Advocacy Alliance and the Japan Community Network united in their own lobbying exercise – a joint letter to Hakan Harman, a Turkish Australian who has become the new chief executive of Multicultural NSW, the state government body dedicated to maintaining racial harmony. They urged him to adopt guidelines advising councils and other authorities not to take sides in debates when considering support for memorials or recognition of historical events.

On February 3, the Turkish alliance issued a press release congratulating Multicultural NSW for having distributed such guidelines. But this was the first that most ethnic leaders in the state had heard about it. Nobody had consulted them. Nor had Harman consulted the Minister for Citizenship and Communities, Victor Dominello, before issuing his guidelines, the preamble to which urged authorities not to "assign blame" when acknowledging historical grievances.

This week, all hell broke loose. The Armenian, Assyrian, Greek, Cypriot and Korean communities demanded Harman be sacked if he would not resign. Dominello refused but he had ordered Harman to withdraw the guidelines and to work to "restore community harmony". Harman apologised, pledged wider consultation and said he had not intended to "inflame concerns or upset anyone".

But he did. The underpinnings of NSW's multicultural success story are robust, and yet there can be fragile moments. This was one of them. For almost four decades, Multicultural NSW and its predecessors, the Community Relations Commission and the Ethnic Affairs Commission, have done much of their work delicately behind the scenes, putting out spot fires before most of us noticed the flames.

But the agitators against Harman say his role became untenable because, they claim, he pushed the barrow of Turkey and its denial of Ottoman-Turk genocides against Armenians, Assyrians and Greeks during World War I.

Harman's guidelines did not mention Turkey or Japan, but his opponents believe they were clearly aimed at memorials in the pipeline. These include a statue to be erected in Strathfield by the Korean and Chinese communities in honour of "comfort women" used as sex slaves by Japanese soldiers during World War II. Another is a monument for Willoughby, to be unveiled on April 24, when Armenians will mark the 100th anniversary of a genocide that they say killed 1.5 million men, women and children – half of their people.

"These monuments are not an attack on the Turkish or Japanese people of today," says Vache Kahramanian, executive director of the Armenian National Committee of Australia, "just as Holocaust monuments are not an attack on current-day Germans. They are recognition of historical facts; and they are important for the healing of victims and their families."

"And," agrees Luke Song, president of the Korean Society of Sydney, "they are a lesson for the next generations: these terrible things must never happen again."

Tesshu Yamaoka, president of the Japan Community Network, along with the Turkish alliance, takes umbrage at the Holocaust analogy or the suggestion that they were attempting to "airbrush" atrocities from history.

While Japan apologised to and compensated some Korean comfort women, Yamaoka says, claims of 200,000 women forced into sexual slavery have been "highly fabricated for political purposes". He points to research by Professor Park Yuha, of Sejong University in South Korea, that only hundreds of women were coerced. Yamaoka blames the bullying of Japanese children in north America on a reaction to such monuments and says he fears the same will happen here.

The Turkish alliance says no international court has found the Ottoman Turks were guilty of "genocide". The Turkish ambassador to Australia, Reha Keskintepe, tells Fairfax Media there were many Armenian casualties when Ottoman Turkey decided to "relocate" them while it was under invasion from the West and Russia in 1915. But there was never a plot to eradicate Armenians, he says.

Only last year, Foreign Minister Julie Bishop reassured her Turkish counterpart that Australia does not use the word genocide. Bishop prefers to refer to "tragic events", as does Britain. Barack Obama, who called it genocide in 2008, avoids that word now that he is US President and Turkey is strategically critical.

Turkey will play host to thousands of Australians at Gallipoli when they commemorate the 100th anniversary of that tragic battle on April 25 this year – the day after the centenary of the Armenian tragedy.

But the NSW Parliament recognised the Armenian tragedy as genocide in 1997, and the next year it erected its own monument, which carries the resolve of MPs to reject "attempts to deny or distort the historical truth". In 2013, the State Parliament extended its acknowledgement to the genocide of Assyrians and Greeks in the final years of the Ottoman Empire.

Among the guidelines now withdrawn by Harman was the consideration of being consistent with Australia's foreign policy, as determined by the Commonwealth. This alone would have put the State Parliament, and its memorial, at odds with the guidelines.

Ambassador Keskintepe says those guidelines would have been constructive in a state with a population derived from more than 200 nationalities. Do we build monuments to every claim and counter-claim of atrocity, he asks. But he denies providing financial support to the Turkish Advocacy Alliance; rather the embassy gives moral support to its efforts to "counter the false Armenian claims that are damaging to the Australian-Turkish friendship". This extended to sending baklava, the Turkish sweet pastry, to an event which the alliance arranged at Federal Parliament for the Australian-Turkish Friendship Group.

Asked why the alliance had admitted in its newsletter last year that donors' pledges had not been forthcoming and it was "entirely reliant on campaign-specific assistance from the consulate", Keskintepe replied: "I am the embassy, not the consulate, but to my knowledge there has been no financial assistance from the embassy, the consulate or the Turkish government."

Canada, France, Germany, Spain, the Netherlands, Russia, Greece and 43 US states recognise the Armenian genocide. In Switzerland it is a crime to deny it was genocide and, in a challenge to a Swiss prosecution in the European Court of Human Rights, Geoffrey Robertson, QC, and Amal Clooney, wife of actor George Clooney, are representing Armenia.

Robertson says Turkey will jail people for the crime of "insulting Turkishness", and this includes claiming there was a genocide. Keskintepe calls this a fabrication. In Turkey, "expression is totally free, including the Armenian claims. In the other case, you cannot say one word in Armenia that there was not a genocide."

Stepan Kerkyasharian is an Armenian who spent almost 25 years at the head of the Ethnic Affairs Commission and Community Relations Commission until his retirement in late 2013. His supporters say he was never accused of pushing the Armenian barrow during that time. But now Kerkyasharian is critical of the Harman guidelines, although he is not among those agitating for his sacking.

"Just because an event is described by one party and denied by another is not, of itself, sufficient to say that the event should not be remembered," Kerkyasharian says. "Some in Australia would object strenuously to the concept of the stolen generation. Does that mean we should not put up a monument to the stolen generation?"

In any case, the guidelines are dead and buried. Asked if they might be modified and re-issued following consultation, Dominello told Fairfax Media: "These guidelines compounded the difficulties surrounding the commemoration of historical events and they will not be revisited by Multicultural NSW."