Australia's electronic intelligence agency could smash the computer networks of criminals domestically using "offensive cyber" operations presently confined to overseas targets under proposals being discussed among national security officials.

The Australian Signals Directorate (ASD) could also sit within the networks of major Australian power, water, telecommunications and other critical infrastructure companies to help defend them against foreign cyber attacks.

Minister for Home Affairs Peter Dutton has said previously the government would "have a look at" all options to disrupt cybercrime such as child exploitation. Credit:AAP

The Sydney Morning Herald and The Age can reveal that a greater domestic role for the ASD remains a live consideration for the Morrison government despite the political firestorm that has erupted since police raided a journalist's home to investigate a top-secret leak of the ASD proposals.

Senior officials have repeatedly stated that the proposal never amounted to spying on Australians - a position strenuously underscored by multiple sources in recent days.