The Britons are being challenged under Australia's Racial Discrimination Act by Lorenzo Poletto, an Italian immigrant, who claims they have privileged treatment over other immigrant nationalities because they are allowed to vote without being Australian citizens.
Mr Poletto's action before the High Court is being backed by Ausflag, a group of high-profile Australians who have been campaigning for years to have the Union flag removed from the corner of the Australian flag and have the Britons struck off Australia's electoral roll.
The British people at the centre of the dispute arrived in Australia after 1949, but have never taken citizenship. Until the electoral laws were changed in 1984, it was legal for such Britons to vote in Australian elections, though illegal for immigrants from other backgrounds who had declined to take citizenship. The change in 1984 removed this anomaly, but it did not apply retrospectively to Britons who had emigrated under the old system.
Now Australia is preparing to hold a constitutional convention next year which will decide how a referendum could be held on becoming a republic. Half the delegates to the convention will be elected by voters on Australia's electoral rolls. Mr Poletto insists it is wrong for Britons without citizenship to have a vote on the future of the monarchy in Australia when other immigrants who have not become citizens - such as himself - will have no such say.
Mr Poletto, a plumber who emigrated in 1960 and who is married to an Australian, says he has never taken Australian citizenship precisely because of the links to the monarchy that required new citizens to pledge an oath of allegiance to the Queen. The former Labor government abolished the oath in 1994 and replaced it with a pledge of loyalty "to Australia and its people".
Nevertheless, Mr Poletto says he will take the case to court on behalf of all non-British immigrant groups who are excluded from voting for the constitutional convention. "We don't live in a two-class system here," he said yesterday. "The day when Australia breaks its ties with the monarchy, I'll be the first to join up and become an Australian citizen."
Ausflag has sought legal advice, which suggests the action may succeed under anti- discrimination legislation, and the challenge has the support of the Australian Republican Movement and various ethnic organisations.
The row comes as Australians have been assessing the impact of Diana, Princess of Wales's death on the country's republican movement. An opinion poll taken three days after the princess died showed 53 per cent of people supported a republic compared with 47 per cent in June last year. Those who supported a constitutional monarchy fell to 37 per cent from 42 per cent. Since the princess's funeral, leading newspapers have suggested that her disappearance from the scene has only highlighted the monarchy's old-fashioned image and Australia's need to move on.
The Australian Financial Review, a national business daily, said yesterday: "Struggling with its own demons, the House of Windsor cannot provide the symbolic direction or any serious point of reference for Australia. That is up to us. It is time Australia created its own symbols, reflecting its own culture, and stopped reaching into a past of nice memories but insufficient signposts to the future."