Cabinet is meeting in Canberra on Tuesday to sign off on a new package that would force telecommunications to retain customer data for up to two years.
Cabinet's national security committee is understood to have approved on Monday night laws to make it mandatory for telecommunications companies to store customer data for at least two years.
The government has yet to detail what exact data sets that it would want the companies to store for access by government agencies.
The data can already be accessed without a warrant for criminal and intelligence investigations, but monitoring of internet or telephone use over a period of time requires a warrant from the attorney-general.
The government had originally said it was putting off the proposal for the time being, but news of the fast-tracked approval of the controversial plans was leaked to the Daily Telegraph this morning.
It appears, however, that Liberal ministers were unaware of the proposals prior to it being reported in the media. At a doorstop this morning, Communications Minister Malcolm Turnbull declined to comment on the proposal, stating that it had yet to appear before Cabinet.
"The issue that you're talking about I've seen speculated in the press, hasn't come to Cabinet yet and I'm not in a position to add to the speculation," he told journalists this morning.
But Turnbull said that government intrusion into private lives should be limited.
"We are a Liberal government, we believe in small government. We are absolutely committed to individual liberty and privacy and we believe that the incursion of government into our lives, into our affairs, should be absolutely limited to no more than is necessary. In this case, in the context of data retention, for national security. So you can be rest assured that those matters are being very carefully considered," he said.
Turnbull's comments today are at odds with comments the then-shadow minister made in October 2012 on Labor's public inquiry into data retention.
"This data retention proposal is only the latest effort by the Gillard Government to restrain freedom of speech," he said.
"I must record my very grave misgivings about the proposal. It seems to be heading in precisely the wrong direction."
"Surely as we reflect on the consequences of the digital shift from a default of forgetting to one of perpetual memory we should be seeking to restore as far as possible the individual's right not simply to their privacy but to having the right to delete that which they have created in the same way as can be done in the analogue world."
Brandis' office was contacted this morning, however no response had been received at the time of writing.
An initial tranche of national security laws, introduced to parliament in July, strengthened the powers of the Australian Security Intelligence Organisation (ASIO).
Attorney-General George Brandis said last week that home-grown terrorism was an "insidious threat" that could not be dealt with properly without data collection and surveillance.
Director-general of security David Irvine told a parliamentary committee in July that ASIO had foiled "four or five" terrorist attacks on Australian soil in the past decade, but changes in technology were making it more difficult.
"Australians need to have confidence that their security intelligence and law enforcement authorities will be able to ensure that the threat remains as remote as we can reasonably make it and that we have the legislative and technological tools to do so," Irvine said.
Support for the proposal isn't guaranteed within Labor at the moment, Shadow Attorney-General Mark Dreyfus told ZDNet yesterday that there should be a full, and lengthy public discussion about data retention before legislation goes through parliament.
"It's very important that any suggested regime, and we don't know what the government has in mind, has safeguards, the right oversight, and there is also the issue of cost," he said.
"Obviously one of the issues the government has to address in any proposed scheme is who is going to pay for it, and if Senator Brandis expects the industry to cover the cost for mandatory data retention, he needs to make that very clear."
Acting Greens Leader Adam Bandt said the proposal is a "massive overreach".
"Let's be clear. We're talking about every article read online, detailed location data collected by phones, every email sent, every item purchased being available to the government and its agencies," he said.
"If the government suspects people are engaging in illegal activities online, it should have to seek a warrant, as is the case with other kinds of communication.
"You can fight terrorism without sacrificing all our freedoms and another key bulwark the Greens want to see in place is Parliamentary oversight of data collection by governments."
Australia's third-largest telecommunications company iiNet has estimated that setting up a data retention regime will cost the company AU$100 million in the first two years, and more after that. The company has said that the cost will be passed onto consumers.
The leaking of the plans to the media comes as part of the legislation before the parliament has led to speculation that media outlets could be prosecuted for publishing confidential documentation associated with national security operations.