Lily is pictured crouched down as she is handcuffed by police in the prank photo, which was taken hours after she landed at Gold Coast airport.
The snap was posted to Lily’s Twitter account with the caption, but was soon deleted.
A spokesman for the police force said: "At her request, the members involved placed open handcuffs on Allen for a photo opportunity."
"It appears the members involved were caught up in the moment and standard protocols were breached."
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Gold Coast city councillor Dawn Crichlow was also not impressed with the stunt.
She said: “I don't appreciate a photo of ... police playing around with their handcuffs."
“It's bad that the federal police allowed this to happen and they should be hauled over the coals.”
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She added: “Just a bit of fun would have been to give her the police cap and have a photo taken like that, that would have been fun.”
Do you think Lily and the police overstepped the mark with the prank?