Bernard Tomic has been put on notice ahead of the Games in Rio de Janeiro after his behaviour at the Madrid Open was labelled as "appalling" by Australian Olympic team chef de mission Kitty Chiller.

Tomic sparked outrage at the Madrid Open when he virtually tanked on match point against Fabio Fognini on Tuesday, holding the head of his racquet instead of the handle as the Italian closed out the contest with an ace.

The maligned 23-year-old Australian further fuelled uproar after reacting to the accusations of tanking by saying "would you care if you were 23 and worth over $10million?".

And Tomic's actions have angered Chiller, who warned the world number 22 he could miss the trip to Rio in August if his behaviour does not improve.

"I think it was appalling behaviour," Chiller told reporters following Saturday's Australian Olympic Committee's AGM.

"It goes against every ... value that all the Olympians live by, it goes against everything that we've been trying to build in this team.

"I would not want to see any of our Olympic team members behave in that way."

"At this point of time, the tennis nominations aren't due in for six or seven weeks, so I can't comment [if Tomic will be accepted]," Chiller continued.

"But based on the last 48 hours, all I can comment on is that is not behaviour I would want from a team member, in a team that I'm responsible for."

On Tomic and countryman Nick Kyrgios — another controversial youngster — Chiller added: "Every athlete is under the microscope now. There's a few athletes that are on watch and those two names are among them."