Indian doctor Mohamed Haneef, who was wrongly accused of having links with the failed United Kingdom terror plot, on Monday said that the Australian authorities might have targeted him because of his race and religion.

"It might be just because I am an Asian Muslim," the 27-year-old Bangalore medico was quoted as saying on ABC radio.

"The government needs to look into the matter of why I was arrested in the first place and whether there was any real, legitimate threat. The case was circumstantial," he said.Haneef said that he had never experienced any racism from colleagues or patients while working at the Gold Coast Hospital and that his idea of Australia as a fair country had not changed.

The Australian government needs to consider what prompted the Australian Federal Police to arrest him though there was never sufficient evidence linking him to the bombing plot, he said.

The Federal government has confirmed that it will hold a judicial inquiry into why Haneef was wrongly charged in the case.

Haneef said he would very happily return to work at the Gold Coast Hospital but had not yet made up his mind.