Creampuff. Are you suggesting a system where VFR and IFR aircraft using "radio arranged separation " in the Australian way on frequencies which are also used by ATC to separate aircraft is " the least impractical solution".
That clearly means the ATC does not have control of the frequency.
And you don't seem to have a problem with this . Does it concern you that no other country allows aircraft to aircraft communications on ATC control frequencies unless approval has been obtained from the ATC?