AUSTRALIAN farmers should be allowed to plant genetically modified crops as soon as possible so they can compete with the rest of the world, according to a confidential Federal Government report.

Genetically modified crops pose no danger to human health or the environment and should be given the green light, the report said.

But environment and public health groups expressed grave concerns, saying the risks were not yet understood.

Institute of Health and Environmental Research director Judy Carman, an epidemiologist and senior lecturer at the University of Adelaide, said a number of studies had shown that rats fed a diet of genetically modified canola had recorded increases in their liver weights of about 16 per cent.

"These rats were getting swollen livers and yet no more research into why that was happening has ever been done," Dr Carman said.

"We should be demanding further testing, because when you look at the safety aspects we just don't know what the potential impacts are."