Prime Minister Scott Morrison has demanded China apologise for - and Twitter remove - a highly offensive tweet depicting an Australian soldier with a knife to the throat of a child.

Morrison described the tweet as disgusting and utterly outrageous. Australia has protested to the Chinese embassy in Canberra, and a protest is also being made by Australia's embassy in Beijing.

"The Chinese government should be totally ashamed of this post. It diminishes them in the world's eyes," Morrison told a virtual news conference from The Lodge, where he is still in isolation after his trip to Japan.

"Australia is seeking an apology from the Ministry of Foreign Affairs, from the Chinese Government, for this outrageous post. We are also seeking its removal immediately and have also contacted Twitter to take it down immediately."

Following the recent release of the Brereton inquiry into alleged atrocities by some members of Australian special forces in Afghanistan, the tweet was posted by Lijian Zhao, spokesman and deputy director general of the information department in the Chinese Foreign Ministry.

It said: "Shocked by murder of Afghan civilians & prisoners by Australian soldiers. We strongly condemn such acts, &call for holding them accountable".

A line in the illustration said: "Don't be afraid, we are coming to bring you peace!"

Morrison said the repugnant post of a falsified image of an Australian soldier threatening a young child had come from an official Chinese government Twitter account.

It was "truly repugnant" and "deeply offensive" to every Australian.

"[To] every Australian who has served in that uniform. Every Australian who serves in that uniform today. Everyone who has pulled on that uniform and served with Australians overseas from whatever nation," he said.

"It is a false image and a terrible slur on our great defence forces and the men and women who've served in that uniform for over 100 years."

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Morrison said while there undoubtedly tensions between China and Australia, "this is not how you deal with them".

Rather, the way was to engage directly in dialogue between ministers and leaders.

"And despite this terribly offensive post today, I would ask again and call on China to re-engage in that dialogue.

"This is how countries must deal with each other to ensure that we can deal with any issues in our relationship, consistent with our national interests and respect for each other's sovereignty. Not engaging in this sort of deplorable behaviour."

Morrison said he hoped "this rather awful event" might lead to a "reset" in the relationship, allowing a dialogue to be restarted where there could be sensible talk about issues - "because this type of behaviour is not on".

Morrison sought to put the situation in a wider international context.

"It's not just about Australia. Countries around the world are watching this. They see how Australia is seeking to resolve these issues and they're seeing these responses.

"This impacts not just on the relationship here, but with so many other sovereign nations, not only in our own region, but like-minded countries around the world who have expressed similar sentiments to Australia about many issues. And so it is important that these things end and the dialogue starts."

When he was asked why he didn't write to Chinese President Xi Jinping directly, Morrison said, "You assume that there hasn't been such interactions. We've constantly sought that engagement. This is not new."

Asked about the controversial issue of revoking the Meritorious Unit Citation for Special Operations Task Groups who served in Afghanistan between 2007 and 2013, which was recommended by the Brereton report, Morrison said no decision had been made.

This is despite the chief of the Defence Force, Angus Campbell, saying when releasing the Brereton report that he would write to the governor-general asking for the revocation.

"No decisions have been made on that and were decisions to be made on that, that would only be following a further process. And that is where that matter rests right now," Morrison told his news conference.

Opposition leader Anthony Albanese said he stood with Morrison in his condemnation of the China tweet. He said the opposition would not be asking about it in question time - the matter was above politics.

There was an immediate pushback from China - via Twitter - to Morrison's attack.

Hú Xījìn, editor of the state-owned Global Times, tweeted: "It is a popular cartoon that condemns the Australian Special Forces's brutal murder of 39 Afghan civilians. On what ground does Morrison feel angry over the use of this cartoon by the spokesperson of Chinese FM? It's ridiculous and shameless that he demanded China to apologize."

The latest deepening of tensions in the bilateral relationship comes days after the Chinese imposed punitive tariffs on Australian wine.

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Author: Michelle Grattan - Professorial Fellow, University of Canberra