A Senate inquiry has rejected the Federal Government's plans to prohibit conduct that offends or insults, saying the move could limit freedom of expression.
The inquiry has been considering a draft bill that wraps together five existing human rights and anti-discrimination laws.
The aim of the bill is to provide a clearer definition of what behaviour is considered unacceptable and how people can make complaints.
The draft includes a clause stating that unfavourable treatment of another person includes conduct that offends, insults or intimidates.
The Coalition and legal groups have raised concerns that would curtail freedom of speech.
Media organisations including the ABC, Fairfax and News Limited also argued against the clause, saying many media organisations publish or broadcast material that some members of the public will find offensive at times, ranging from satirical programming to political commentary.
Last month, former attorney-general Nicola Roxon acknowledged the concern and made the clause optional rather than mandatory.
But the Senate inquiry, which received more than 3,000 submissions, has recommended the clause be removed altogether.
The inquiry says the clause may have unintended consequences, including making it illegal to offend someone.
The Federal Government is not making any promises about agreeing to any of the recommendations.
Attorney-General Mark Dreyfus says there is a lot in the report for the Government to consider.
"Public views, which are going to help the Government identify whether its intention of consolidating these important laws," he said.
"But it's an extensive report. It will require close consideration and a full response will be made shortly."
But shadow attorney-general George Brandis says the draft legislation is so flawed it cannot be fixed.
"It creates a scheme in which Government would be much more intrusive, much more invasive, effectively establish itself as an arbiter for community standards in a way we don't think is the role of the state at all," he said.