Hackers in China infiltrated Australian networks carrying military communications, according to an investigation by the ABC's Four Corners.

The government's trade commission for exporters Austrade, the Defense Department's elite research division, and NewSat Ltd. - a company doing work with the US National Security Agency (NSA) cyber spy agency - suffered significant intrusions.  In the case of Newsat, the company's network was so compromised that it had to be rebuilt in secret, before the company ultimately failed and was put into receivership.  A former executive said it was one of the worst hacks he'd ever seen.

Authorities believe these hacks were sponsored by the Chinese Government.  A spokesman for China's Embassy in Canberra called the allegations "totally groundless" and "false cliches".

But these revelations are apparently a drop in the ocean.  "We don't talk about all the breaches that occur," said the Prime Minister's cyber security adviser, Alastair MacGibbon, noting that the government's computer networks are "attacked on a daily basis".

Former CIA and NSA chief Michael Hayden says it's all part of the big cyber espionage game going on all over the world:  "It is what adult nation states do to one another," he said.  "What my dad told me when I came home beat up from a fight once when I was about 10 years old: 'Quit crying, act like a man and defend yourself'," he added.