Prime Minister Malcolm Turnbull’s office has dismissed claims that the federal government has been considering a proposal to create a US-style Department of Homeland Security for Australia, focused on preventing terrorist attacks.

Fairfax Media reported that the major restructure would extend from the existing Department of Immigration and Border Protection, including the Australian Border Force.

This comes three months after an alleged Christmas Day terrorism plot involving the planned detonation of improvised explosive devices at locations in central Melbourne, including Federation Square and Flinders Street Station.

The proposal details that at least half a dozen relevant federal agencies from two departments would merge to form a mega-department.

It is understood the relocated agencies would reduce the Attorney-General’s department to a legal advisory office.

Immigration Minister Peter Dutton has been pegged to lead the new department under a new title as Minister for Homeland Security and is understood to “strongly favour” the restructure.

But a spokesman for Prime Minister Malcolm Turnbull told The New Daily the claims were untrue.

“The government is continuously looking at ways to make Australia safer,” he said.

“However, proposals for a Department of Homeland Security are pure speculation and there are no plans at this stage.”

Peter Dutton is the preferred candidate to become Homeland Security Minister.

Former prime ministers Kevin Rudd and Tony Abbott reportedly considered the concept of reorganising Australia’s security agencies but rejected the idea because it was “too hard”, according to a former senior official involved in the process.

The proposal has allegedly been contested by ministers and senior officials, with complaints that the shakeup would be “counterproductive” and was “unnecessary”.

A minister told Fairfax Media that the proposal did not have the support of any agency other than the plan’s architect, Immigration Department secretary Mike Pezzullo and Australian Border Force chief Roman Quaedvlieg.

“The people who militarised Customs are now trying to take over the entire national security system,” the minister said.

The United States merged 22 agencies to create its Department of Homeland Security in response to the September 11 terror attacks in 2001.

The incident exposed poor co-operation between agencies, a problem that Australia also faces, a Canberra official said.

“There are data jealousies between agencies, data gaps, a lack of full data sharing,” the official told Fairfax Media. 

“Cooperation at the moment is ad hoc, episodic and personalised. The only thing that keeps the system functional is personal relationships.”

– with AAP