Drew Pavlou was detained in London while protesting outside the Chinese embassy last week after authorities alleged he had emailed the threat.
However, Pavlou has accused the Chinese embassy of creating and sending the email that led to his arrest.
Pavlou's lawyer provided an update when the student activist's $3.5 million damages claim against University of Queensland was mentioned in Brisbane Supreme Court on Friday.
"Whilst in the UK he was subject of a false flag operation by the Chinese embassy which generated a falsified email reporting to come from him threatening an attack on the embassy," the lawyer told the court.
"He was arrested by metropolitan police under the UK terrorism legislation and held ... for 24 hours without consulate support or access to lawyers.
"By a curious arrangement which I cannot understand, although he has not been charged with anything he has been advised by the metropolitan police that if he attempts to leave the country he will be arrested at the airport."
Pavlou is suing UQ for damages after he was suspended in 2020 for two years following a disciplinary hearing that examined misconduct allegations reportedly linked to his on-campus activism supporting Hong Kong and criticising the Chinese Communist Party.
The suspension was later reduced to a semester while also completing 25 hours of "campus service".
Before his arrest outside the London embassy, Pavlou had been ejected from this month's Wimbledon men's final brandishing a "Where is Peng Shuai?" sign, referencing the Chinese tennis star he claims is being persecuted.
He had made a similar protest at the Australian Open.
In recent months Pavlou was also one of five protesters at Chinese ambassador Xiao Qian's speech at a Sydney university and organised a North Korea's leader impersonator to gatecrash former prime minister Scott Morrison's campaign in Melbourne.
Meanwhile, Pavlou's UQ matter has been adjourned until next month.
3°C