The infamous Watergate scandal "pales" in comparison to the allegations about the Trump administration's links to Russia, former United States intelligence chief James Clapper has said in an explosive set of remarks in Canberra.

Mr Clapper, who served as Director of National Intelligence under Barack Obama and in senior roles with Republican leaders as well, also said he would "understand" if US allies such as Australia withheld intelligence from American counterparts because of Mr Trump's demonstrated lack of discretion with such sensitive secrets.

The 50-year veteran of the military and the intelligence community painted a picture of disconcerting dysfunction in Washington with "assaults on American institutions coming from both external and internal sources" and most strikingly said the Trump-Russia links were much worse than the notorious scandal that toppled former US president Richard Nixon in the 1970s.

"I lived through Watergate. I was on active duty then in the Air Force as a young officer," Mr Clapper said following a speech to the National Press Club in Canberra. "It was a scary time . . . I have to say, though, that I think you compare the two that Watergate pales really in my view compared to what we're confronting now."

The FBI is investigating links between the Trump team before and after the election that brought Donald Trump to the White House last November. Mr Trump fired the FBI director James Comey but Mr Comey will on Friday appear before a Congressional hearing into the affair.

The former spy boss also urged Australia to be cautious in its dealings with China, saying its attempts to interfere in Australia were comparable with Russia's intervention in US democracy in the hacking of the Democratic Party.

"I see some striking parallels between what our two countries are experiencing at the hand of these two countries," he said.

He said Australia should deal with China "with both caution and confidence" while never forgetting the importance of its own democratic institutions.

Mr Clapper, who is a visiting professor at the Australian National University, said he hoped US allies and partners would not withhold intelligence from Washington but said he would understand if they did. Mr Trump reportedly revealed sensitive Israeli secrets about the so-called Islamic State group in an Oval Office meeting with senior Russian officials.

US officials also angered Britain by leaking evidence in the Manchester terrorist bombing to the media.

"Australia and any other countries we share with will have to make their own judgments about that . . . I hope it doesn't happen but I could certainly understand if it did," he said.

"I will say that, in my 50-plus years in the intel business, I don't know of a time where we have shared more pervasively and more thoroughly than we do today and it would be a shame if that were jeopardised or set back."

Australia is part of the "five eyes" intelligence-sharing group along with the US, Britain, Canada and New Zealand. Australia is overwhelmingly a net beneficiary in such sharing with the US.

Mr Clapper said that while he had great faith in the strength of US institutions - which he described as being under "assault" from the Trump administration - he said his confidence was not unlimited.

"So the question is: How long can these assaults go on and the institutions not be irrevocably damaged? I honestly can't say."

He went on to say that he would look to countries like Australia to "fill whatever void is created by the absence of US leadership".

The bungled break-in of the Democratic National Committee's headquarters in Washington DC's Watergate building in 1972 ultimately cost the then Republican president, Mr Nixon, his job. Senior White House officials served prison terms.

"Watergate" is regarded as the most significant crisis of modern US politics and also as the gold-standard of investigative journalism used to reveal the cover-up. Since Mr Nixon's fall in 1974, numerous scandals around the world have been tagged with the suffix "gate" to exaggerate their importance and terms like "follow the money" and "deep throat" have crept into the journalistic lexicon.

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