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Can the extension be granted permission to delete the files and still block the directory from public acess.

These are two different things anyway.

In order for the extension to be able to upload files you either need to give the correct ownership & permissions to the folder or enable Joomla!'s FTP options in Global Configuration.

Blocking the directory from public access is as easy as uploading a .htaccess into that speicif directory with the following contents:

order deny, allow
deny from all
allow from none

I seriously doubt that Admin Tools has anything to do with this issue. It sounds as a folder permissions issue. File system permissions. Anyway, let's make sure that the problem is indeed caused by Admin Tools. In order to do so, try the following:

1. Try setting the Error Reporting level in your Global Configuration to "None". Many errors are caused by harmless PHP Notices and Warnings being output to the browser, breaking anything which requires HTTP header manipulation such as Joomla!'s session management, AJAX calls and download systems.

2. Try to replicate the issue after disabling the "System - Admin Tools" plugin. If you can still replicate the issue, it is not caused by Admin Tools. Disabling that plugin means that Admin Tools code (including the Web Application Firewall) is not running on your site.

3. If you suspect an issue with the .htaccess file, replace its contents with the contents of the stock htaccess.txt file shipped with every version of Joomla!. If you are on GoDaddy please wait for 1-30 minutes for the changes to be effective. Then, retry loading the problem page. If you can still reproduce the error, then it is not caused by .htaccess Maker.

If doing any of the above resulted in the issue still occurring, it's not related with Admin Tools and I can't help you. If doing any of the above did stop the issue from occurring, we'll have to do some troubleshooting.

First go to Admin Tools, Web Application Firewall, Configure WAF. Make sure "Log security exceptions" is set to Yes; if it's not, set it to Yes and click on Save. Now try reproducing your issue. Immediately after that, please go to Admin Tools, Web Application Firewall, Security Exceptions Log and go to the last page. The last log entry should have the date and time of when the issue occurred. Please copy the Reason and Target URL here so that I can help you.

If, however, you do not see a log entry, or the Date and/or IP address do not match your last access, this problem is not caused by Admin Tools' WAF. In this case, you will have to do some .htaccess troubleshooting. You may need to read the general .htaccess troubleshooting page, as well as the page on finding out necessary .htaccess exceptions.

No problem. That makes sense, actually – I have had that problem a few years ago with some forum software I shall not name :)