News Corporation headquarters
Australia said it would hold a media inquiry following the British hacking scandal that sank Rupert Murdoch's best-selling tabloid, News of the World.
A spokesman for Communications Minister Stephen Conroy on Tuesday said the scope of the inquiry was yet to finalised but the ruling Labour party had decided that a probe was required.
"What's been agreed is that we're going to have an inquiry into media and media ownership," the spokesman told AFP.
"The terms of reference are still being negotiated. We're going to make an announcement when we're done, but it's imminent."
Labour faced intense calls for an official review of Australia's media after the phone hacking scandal, which saw News Corp chairman Murdoch drop his bid for satellite broadcaster BSkyB and face a grilling by British MPs.
Prime Minister Julia Gillard warned Murdoch's Australian arm News Limited, a dominant player in the press baron's home nation, that it faced some "hard questions" following the British firestorm.
Murdoch controls about two-thirds of Australia's regional and metropolitan newspapers, has a stake in broadcasters Sky News and Fox Sports, and is angling to run the Australia Network, the international public TV channel.
Fairfax Media is the other key player in Australia's print media.
Conroy's spokesman said the inquiry would likely include a "broad reference" to media ownership, but "it wouldn't be a criticism of one media organisation," instead examining measures like strengthening Australia's newspaper regulator.
The conservative opposition immediately rejected the move as a 'naked attempt to intimidate the media".
"There is no evidence of any significant new problems with the media in Australia," opposition leader, Tony Abbott told reporters.
News Limited's chairman, John Hartigan has strongly distanced the company from events in Britain, but launched a review of all payments made in the past three years to ensure they were legitimate.
Hartigan has also vowed to cooperate with any inquiry.
The left-leaning Greens party, a key partner in Gillard's minority coalition government, has led calls for a media probe in Australia, but the government is understood to object to their terms of reference as too ownership focused.
Both Labour and the Greens have complained about coverage by the Murdoch press, with Conroy previously accusing News Limited of running a "regime change" campaign against the government intent on forcing an early election.
Abbott said it was Labour's "performance which is causing the problems for this government," not media coverage.
Canberra has already moved to introduce a legal right to privacy following events in Britain, paving the way for people to sue media organisations for serious breaches. But it has ruled out any regulation of the media.