John Howard hopes to introduce new anti-terror laws

Mr Howard said he could give no further details, for operational reasons.

He said the Senate would be recalled to pass an amendment to existing anti-terror laws, relating to the description of a particular action.

Mr Howard's government hopes to introduce tough new counter-terrorism legislation by Christmas.

But those plans have been delayed in parliament because of concern among some state leaders that the new laws threaten civil liberties.

'Cause of concern'

Australia has not experienced a major terrorist attack on its soil, although Australians overseas have been targeted in blasts in Indonesia.

Mr Howard told reporters in Canberra the government had received information which gave "cause for serious concern about a potential terrorist threat".

"We have seen material. It is a cause of concern," he said.

But he said the current security alert would not be upgraded.

Mr Howard said the proposed amendment would strengthen the capacity of law enforcement agencies to protect Australians.

The change was approved by the House of Representatives on Wednesday, and the upper house Senate would be recalled on Thursday to pass it into law, he said.

The amendment will replace the word "the" with "a" in the definition of a terrorism offence, to clarify that it is not necessary to identify a particular terrorist act.

It would mean that people could be charged for considering a terrorist attack, even if they had not yet decided on its timing and location.

Mr Howard's announcement came a day after the nation's domestic intelligence service warned in its annual general report to parliament of a threat of home-grown terrorists.

Reforms row

The amendment comes as the federal and state governments negotiate a larger package of anti-terror measures.

The measures include tightened security at airports

The government needs the support of the states - all run by the opposition Labor Party - to enforce the measures.

State leaders, who backed the bill last month but have yet to agree a detailed draft, fear it could threaten civil liberties and breach the constitution.

The law would allow terror suspects to be held without charge for 14 days.

The most controversial element is a shoot-to-kill provision, giving police officers the right to use lethal force in the pursuit of suspected terrorists.

The leaders of Australia's eight states and territories said in September they would back the law, in return for a promise from Mr Howard that the measures be reviewed after five years.

However, Mr Howard has been accused of trying to push through the legislation too quickly.

Muslim leaders have also expressed fears that the laws could spread intolerance.

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