The comedian, who fronts television show 'The Last Leg', admitted in a post on social media that while he might be an "unfunny leftie wanker", he was "no traitor" to his home country of Australia for calling people out on their Islamophobia.
Hills began the much-lauded message by describing the torrent of abuse he received after lambasting an MP for saying that all terrorists were Muslim.
"I’ve been called a lot of things in the past few days, many of them deserved. 'Leftie wanker'. 'Islam apologist'. 'Unfunny ****'. I’ve also been called a 'traitor' and even worse, 'un-Australian,'" he wrote.
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Hills recounted a meeting with senior Australian diplomats in January, when he came to some sweeping conclusions about the best methods to tackle Isis.
"Earlier this year I was invited to an Australia Day drinks function at the Australian High Commission in London," he continued.
"As the beer flowed and the lamingtons were passed around I found myself in deep conversation with a variety of governmental experts on The Middle East and in particular, Syria.
"As this was a few weeks after the Charlie Hebdo attacks I took the opportunity to find out all I could about this so-called Islamic State group.
The 45-year-old stand-up artist pointed to two methods IS militants were reliant upon to join more recruits up to their ranks.
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"I learned a lot of things that night, but the one that stood out was this," he explained. "Islamic State need recruits and they have two steps to get them.
"1) Create an uprising against Muslims in the West by carrying out attacks in the name of Allah.
"2) Then when young Muslims feel rejected by Western society, make ISIS look like a cool alternative.
"Please remember, this was all expressed to me by officials of both the Australian and British Governments."
Hills told his 170,000 followers on Facebook they should not alienate the "vast majority" of Muslims not concerned with Isis attacks.
"It seemed to me that a good way of combatting this would be 1) be nice to non-ISIS related Muslims (i.e. the vast majority of Muslims) and 2) make ISIS look like idiots," Hills mused.
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"I ran this past my friends at the High Commission, who agreed that this was indeed a good thing to do.
"Now there aren’t a lot of things a one-legged comedian can do to combat a bunch of pricks like ISIS, but when experts in the field from your own government tell you what you can do – you damn well do it."
He went on to mention an on-air competition launched on last week's 'The Last Leg' to rename Isis, the winner being Cyst-ISIS: cos they’re irritating twats”.
From then on, Hills only referred the terror group as Cystitis, ran a weekly segment called “The G-Hadi Spot”, applauded young girls who conned them out of thousands of dollars - all in an effort to ridicule and condemn Isis.
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"I did all this," he said, "not because I am a hippy dippy idealist who believes that fairy wings and puppy dog farts can change the world. I did this because I was advised by representatives of my government who are way smarter than I am, that it was the right thing to do."
"I might be an unfunny leftie wanker, but I’m no traitor.
He proceeded to issue a rallying call to his tens of thousands of fans, imploring them to fight back against the conflation of Isis and its actions with normal Muslims.
"You can do it too," Hills said. "There are countless memes going around at the moment decrying Islam; there are people saying their businesses are closed to Muslims; there are jokes going around making Muslims the punch line.
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"All you have to do is use the word ISIS instead of Islam. Mock the arseholes who are really causing the damage. Cos they hate that.
"Call them Cystitis. Say your business is closed to any Cystitis member who wants your services. Make a meme about how deluded Cystitis are.
"It’s what your government wants you to do."
He finished with a zinger, adding: "And what could be more Australian than taking the piss out of those who deserve it, while giving a fair go to those who need it?"