Say what you like about the Nazis, they were great film lovers. Hitler and Goebbels devoured movies – in between devouring Poland and stomping on France. Hitler adored Mickey Mouse. He liked nothing better than to watch a new film each night, sometimes with his favourite German actress beside him.

One of Goebbels' first acts as minister of propaganda was to make himself head of the German film industry. From 1933 until 1944, when they could no longer afford to make movies given the high cost of losing the war, the German film industry churned out 1200 feature films.

Most were shown in Germany and occupied territories only and were not overtly propagandistic. Hitler wanted entertainment films for the masses, with wholesome Aryans singing on mountain tops – soft propaganda. As things got more serious, the propaganda became more virulent. About 100 of the films were hardcore agitprop, attacking the Reich's enemies: Jews, of course, but also the British, French, Poles and Russians.

After the war, the occupying forces banned 300 of the films. The prints were shut up in vaults and kept as a guilty secret, studied only by film scholars. Some were deNazified, with careful cutting of scenes featuring Swastikas and other Nazi symbols, so they could be shown again. Most of the dirty 300 are now unbanned, but there are still more than 40 features that the German government keeps from general circulation. They are the worst of the worst, the untouchables, the verboten films.

These are the subject of Forbidden Films, a fascinating new German documentary by Felix Moeller. It opened the Holocaust Film Series this week, part of the Jewish International Film Festival that runs until March 25 at the Classic in Melbourne and the Event cinema in Bondi Junction in Sydney.

The documentary begins at the German Film Archive's nitrate storage facility in Berlin, a concrete bunker built to withstand a major explosion. Films preserved on nitrate stock are highly flammable, but the point is symbolic: these walls preserve the films, but they also keep them locked up. This is Stalag Kino for the bottom 40.

Could they be so bad as to still warrant the bans?

That's a fascinating and difficult question. A notorious piece of hate-film like Jud Suss, made in 1940, is still as toxic as the day it was made. Based on the story of Joseph Suss Oppenheimer, an 18^th century Jewish financier, the film reads as a compendium of Nazi propaganda against Jews: money-lending, power-wielding, secret-scheming, daughter-raping, law-breaking, plot-hatching. The film's only solution: hang the criminal and banish his kind.

Jew Suss premiered at the Venice Film Festival in September 1940, where it won the top award. It was a huge hit in Germany, with 20 million tickets sold. It can only be shown now in Germany in supervised screenings, one of which Moeller films at the Munich Film Museum. Audience members are appalled not just by the film's hate message, but by its quality. "It makes me ill because it was so good and it transmits such a horrible message," one viewer says.

Moeller also interviews some ex-neo Nazis, who have had their own copies for years. They use them to indoctrinate recruits. YouTube is a "Nazi propaganda hotbed", one film historian says. One of the neo-Nazis talks about friends watching The Eternal Jew (1940) up to 30 times, until they knew the narration by heart. Der Ewige Jude, in its German title, is a fake "documentary" filmed partly in the Warsaw ghetto, which compares Jews to rats.

Moeller also attends screenings of the banned films in Paris and Jerusalem. Moshe Zimmerman, an historian at the Hebrew University, hosts one of these screenings, attended by camp survivors as well as younger students, few of whom believe the films should be unbanned. "Regardless of whether it is anti-British or anti-Jewish, the danger is still there," Zimmerman argues. "The danger exists that certain stereotypes are expressed and become further established."

These films are a challenge for someone like me, who doesn't believe in censorship in general. They are hateful, powerful, disgusting films – but that is part of the reason I think the German government should lift the bans. The bans aren't working anyway. In fact, they prevent modern Germans from finding out about their own history, which is convenient.

In the film, German director Oskar Roehler argues against the bans. "They are excellent examples of propaganda, even if they are negative, I wouldn't want to deprive anyone of them. Let everyone make what they will of them. Especially if you're a writer or an historian. If you don't know about these films, you know very little about our country."

Beneath this debate, there is a belief that the films themselves are like a virus, a film version of anthrax or polio, especially dangerous for young minds or the intellectually enfeebled. I think that's ridiculous. I wouldn't show them to children, but I would show them to young adults, say 16 and over, in a discussion context.

Keeping them banned adds to their power, rather than defusing it. It makes them seem like they have magical powers of corruption and destruction, like the screaming spirits that erupt from the Ark of the Covenant at the end of Raiders of the Lost Ark. These films are not supernaturally empowered; they just seem that way when we keep them hidden.

Twitter: @ptbyrnes