It's here, among the traditional wooden desks and bench chairs of an old lecture room, that Moorhouse attended evening classes in philosophy, taught by the late Professor John Anderson, a cult figure among students of his time.

Moorhouse, 75, is the noted writer of Australian literature, whose best known fictional creation is Edith Campbell Berry, the idealistic interwar heroine of Grand Daysand its fat sequels Dark Palace and Cold LightThe trilogy has collected just about every major literary prize in Australia including the Miles Franklin.

His new book, Australia under Surveillance, is a rare work of non-fiction, wrapping a critique of censorship and anti-terrorism laws in a passionate defence of democratic freedoms during a time of religious-inspired terrorism.

Across the Quad is the meeting room where Moorhouse first came to the attention of ASIO and so tripped a lifetime of thinking about the excesses of Australia's spy agencies.

But back in 1956 Moorhouse was a country boy from Nowra High School, reading Plato and working afternoon shifts as a cadet journalist for the Daily Telegraph. He lasted one term.

Remembering his bewildered, younger self, Moorhouse feels a twinge of sadness. "I wasn't ready for [university]," he says. Moorhouse found the sandstone institution intimidating. No one in his family had set foot on a university campus before and most of the kids he knew were destined to work in the coalmines or the steelworks.

These days, of course, Moorhouse knows his way to the Manning Bar as well as he does the High Table of Kings College, Cambridge. He is a former Woodrow Wilson Scholar and Senior Fulbright Fellow, and early next year the University of Sydney will confer on him the honorary degree of Doctor of Letters.

It's one of those strange loops in Moorhouse's life that the writer reflects on silently as he wanders the empty Philosophy Room, reading the scratchings of former students and discovering a few that pre-date his arrival. "They're not very clever," he observes.

This is our third attempt to meet. Moorhouse has been laid low by atypical pneumonia, and is "85 per cent" well, still bothered by a cough and a tremor in his right hand.

His preoccupation with ASIO's beefed-up internet surveillance powers brings him out on a blustery cold day when his doctor recommends he should be indoors.

"I'm struggling to get a sense of proportion," he says of the recent raids that netted a plastic ceremonial sword. "Regardless of how [ASIO] want to be seen as being in control, they get caught up in political panic and moral panic and the excitement of the chase, and the game. Are we legislating ourselves into a burning house, to quote Martin Luther King?

"It seems increasingly likely that this connect, the increased status and role of ASIO and the security agencies, will end very badly."'

ASIO and Moorhouse have a "long mutual history" that began when the curious cadet journalist attended a meeting of the communist-dominated Labour Club.

If he had known at the time ASIO had opened a file on him he would have been "scared out of my wits". Moorhouse saw himself as a Fabian socialist, and an atheist.

Later he came to the agency's attention as an unsuccessful applicant for Commonwealth Literary Fund grants and a peacenik with the Campaign for Nuclear Disarmament.

During a pause in writing Cold Light, Moorhouse applied for his ASIO file and received access to one of 13 volumes. The folio of 13 typewritten pages was scrubbed of any identifying names of agents and informers, and came in an anodyne presentation jacket titled Your Story, Our History.

Someone was watching him, he discovered, when he joined the ABC aged 28, his last full-time journalism job before securing a three-book deal with his first short story collection, Futility and Other Animals.

In 1969 ASIO gave Moorhouse clearance to cover military exercises in the Coral Sea. It bothers him still that that even a well-intentioned mistake could have spelled the end of his journalism or blocked the literary grants that sustained his writing during the 1970s.

"There would have been lots of time in my life when I would have been very angry. I thought, do we need this kind surveillance and how much damage does it do to people who are not a threat? How many mistakes are made? How many careers are interfered with? Somehow it degrades society or damages civil dignity to think that there are people in your office [watching you]."

Missing from the ASIO file was any reference to Moorhouse's bisexuality. In the early spring of the '60s sexual revolution, shames and secrets were the trade of spies. Gay men were deemed blackmail risks.

"There was no reference to my sexual life in so far as I had one," Moorhouse says, "but I did my best. I devoted a bit of time to it." He chuckles. "Like every waking moment."

He adds: "In my life there have been situations, sexual situations, which would have interested an old-style ASIO, or a new style ASIO."

Moorhouse was 40 when he went public with his sexual unorthodoxy. "I thought it hypocritical and self-harming not to be open about oneself with those who were curious, and to be secretive was to reinforce stigmas that existed."

His writing ethic of frank disclosure has drawn appreciation from young gay men who have visited his early experimental, explicit works. Moorhouse's penchant for honesty is evident in the autobiographical essay, I,initiation, published in the latest edition of Southerly journal, in which Moorhouse tries to make sense of the solo treks he takes into wilderness country, carrying no more than a compass, map, tent, food and a flask of bourbon whiskey.

One answer Moorhouse offers up for this compulsive, ritualistic adventuring is an injury that occurred during a cub scout induction ceremony when he was 12 years old: falling from a tree he tore his genitals. It deeply affected him.

He reverts to Freud to draw symbolism from the fall. "It probably tells me more about myself than I know," says Moorhouse, who has spent many years trying to walk the difficult terrain of his "tangled, difficult almost unlivable unconscious and its nature, its demands and commands."

Writing is a strange business, he muses. "It requires a detachment, a risk of his own psyche and commitment of self. My sort of writer has to serve the gods of self-awareness. The more aware we are of our own reality, our inner reality and the reality of the world around us, the safer we are."

At the core of Moorhouse's distrust of ASIO lies a deep aversion to authority: to his parents, moral conservatives who might have sided with the Attorney General George Brandis, to teachers, and to bosses.

A one-time trade union organiser, Moorhouse joined a campaign of civil disobedience against sexual censorship, and spent time in police cells.

His absolutist position of perfect free speech did not outlast the attacks on the World Trade Centre and the Bali nightclubs. Terrorism is a real threat to public safety, he says, but he draws line at the battle talk and the erosion of hard-won legal safeguards as the right to silence and the right to a lawyer.

Australians must learn to live with a certain level of disquiet, he says.

Much of Moorhouse's political thinking has been shaped in the commission of four long essays for Griffith Reviewincluding the multi-award-winning critique of anti-terrorism and sedition laws, The Writer in a Time of Terror.

Australia Under Surveillance, however, proved stubbornly difficult to write. History kept threatening to overrun the page. Moorhouse made late rewrites to accommodate ASIO's upgraded terror warnings and a month before publication the largest anti-terrorist action in Australia's history took place involving raids on dozens of homes in NSW and Queensland by 870 federal and state police.

"I had a crisis of confidence and I had the crisis of handling the material, the purely professional demands of relating it to the daily events, but also trying to realise it had to do with the big questions we've been dealing with for hundreds of years. I kept coming to the edge of my knowledge and understanding. I know I missed a few deadlines."

Moorhouse's next novel brings him back to the world of fictional spies. The Book of Ambrose will tell the story of Major Ambrose Westwood, Edith's cross-dressing British spy husband.

"I sometimes see it starting with Ambrose the night before he gets on the train to Geneva and meets Edith. Obviously, she delights him and she is complicit in his sexuality more than she understands, he is part of her sexuality."

Even in fiction, Moorhouse is prone to lapses in confidence. "Sometimes I get up in the middle of the night and pull down a volume of Grand Days and open it up at random and read a chapter [for validation]. Generally, I come away thinking, that's not bad at all."

Australia Under Surveillance is published by Vintage Australia, $32.99.

And another thing

Moorhouse's first published short story was about a high school student who finishes his exams on the day nuclear war breaks out.