The Immigration Department has quashed hopes that Shane Martin, the father of Richmond premiership star Dustin Martin, could be allowed to live in Australia again.
Mr Martin was deported to New Zealand in March last year, after Mr Dutton cancelled his visa, citing Mr Martin's criminal record and links to an outlaw bikie gang.
Lawyers for Immigration Minister Peter Dutton indicated they planned to drop Mr Martin's case in the Federal Court, potentially clearing the way him to return to his family in Melbourne.
Mr Martin remains offshore and has no visa to enter Australia.
Mr Martin's lawyer John Kotsifas, said the Government had flagged it would drop its case, therefore admitting they had incorrectly deported his client.
"The minister's lawyers basically indicated Mr Martin was deported under jurisdictional error and the cancellation of his visa was erroneous," he said.
"They've said the decision was wrong and hopefully this is the end of it and Mr Martin can come back and see his family for Christmas."
However, the Immigration Department has since indicated Mr Martin would not be granted entry to Australia.
"The outcome of this litigation will not result in the re-instatement of Mr Martin's visa," a spokesperson for the minister said.
Mr Martin had his visa cancelled under section 501 of the Immigration Act, which states that people can be removed from the country if they have acquired a "substantial" criminal record.
In October, Mr Dutton said he deported Mr Martin on information that is not publicly available after changing the laws to protect secrecy in deportation decisions.
"I have information that is provided by the intelligence agencies and by law I am prohibited from giving you the detail," he said
Mr Kotsifas said Mr Martin — who is alleged to have links to the Rebels Motorcycle Gang — had never been to jail and his record was "for minor offences".
His son Dustin had a standout season in the AFL this year, winning the Brownlow and playing an integral part the Tigers' drought-breaking premiership.
The midfielder previously spoke about his strong desire to have his father return to Australia.
Mr Martin had been hoping to be back in Australia to watch his son play in the Grand Final in September.
The case has been adjourned to December 19.