The proposal is being flagged by the government to prevent a cyber attack on critical national infrastructure such as the stock exchange, electricity grid or transport system.

'We want to make sure that they are safe from terrorist attack,' Ms Gillard said.

'Part of doing that is making sure we have got the right powers to ensure that we can tell if there is something unusual going on in the system.'

The suggestion has angered civil libertarians, who say the proposal could be abused.

'Our concern is that if given these powers, they are more likely to be used for eavesdropping and corporate witch hunts rather than protecting Australia from some kind of cyber attack,' Mr Dale Clapperton, chairman of the independent Internet rights watchdog Electronic Frontiers Australia, told ABC radio.

Ms Gillard defended the proposal, saying that it was designed to ensure Australian companies were safe from a terrorist attack.

'So, it is a national security move, not a move about an unseemly interest in people's private e-mails,' she said.

The Telecommunications (Interceptions) Act currently allows for the e-mail messages of workers to be monitored only by security agencies.

But Attorney-General Robert McClelland, in an interview with The Sydney Morning Herald, said this needed to be extended to include private companies to protect key infrastructure from the risk of a cyber attack.

Such an attack could 'reap far greater economic damage than would be the case of a physical (terrorist) attack', he said.

'At least 90 per cent of networks exist outside government, but there are no powers for corporate network supervisors to intercept such communications unless they have specific authority from the employee,' he said.

'There needs to be protocols and guidelines developed so companies can protect their own networks.'

Mr McClelland said that he would consult with privacy experts and workers' unions before introducing the laws, which the government hopes will be in place by the middle of next year.

The head of the Australian Council of Civil Liberties, Mr Terry O'Gorman, told national radio that existing laws provided enough protection against terrorism.

'We have passed so many laws in the name of fighting terrorism that we are at serious risk of losing the balance between giving the intelligence services sufficient powers to fight terrorism while at the same time keeping longstanding and cherished civil liberties,' he said.

AGENCE FRANCE-PRESSE