A former US military pilot has been placed under "extreme" restrictions inside an Australian prison while fighting a secretive extradition battle with the Department of Justice in Washington, his lawyer said following a court hearing Monday.

Ex-Marine Daniel Edmund Duggan was arrested in New South Wales on October 21, the same week Britain and Australia issued unusually candid warnings about China's attempts to recruit retired military pilots.

Duggan, 54, lived and worked in China for about five years before his arrest, corporate records showed, although the details of his alleged offences have been sealed by the US government.

Defence lawyer Dennis Miralis said Duggan -- an Australian citizen -- had been classified as an "extreme high-risk restricted inmate" inside a maximum-security facility in Sydney, and had been denied access to writing materials and medical treatment.

"He's presently not even able to access pens for the purposes of writing the nature of his complaint," Miralis told the court.

"This is unprecedented to have an Australian citizen placed on the most strict inmate restrictions, akin to people convicted of terrorist offences," he later told reporters outside.

Miralis suggested outside court that "foreign interference" by the US government could explain the treatment.

"We are concerned there may have been some foreign interference encouraging corrective services to take this dramatic course of action," he said.

Duggan has been detained under Australia's Extradition Act, pending an official request from the US government.

Lawyer Trent Glover, appearing for the US government, said the Department of Justice would file an extradition request before December 20.

"From the United States' point of view, this is nothing more than a usual extradition process," he told the court.

Duggan moved to Australia after leaving the US Marines, running the Top Gun adventure flight company from the southern island of Tasmania.

Top Gun's website said Duggan spent more than a decade flying in the US Marine Corps, reaching the rank of major and working as a tactical flight instructor.

Duggan's case will return to court in late December.

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