The government will soon introduce legislation to give the immigration minister, Peter Dutton, wide discretionary power to strip Australian citizenship from dual nationals involved in terrorist activities.

The minister – whose decision would be subject to judicial review – could act even though the person had not been convicted of a crime. The measure would apply to many Australians fighting abroad who have dual nationality and to people locally who become involved in terrorist activity.

About 40-50 of the about 100 Australians foreign fighters are dual citizens.

But the government has stopped short of endorsing a proposal for the revocation of citizenship of Australians where there are grounds to believe the person could subsequently become a national of another country.

That proposal will be discussed with ethnic community groups.

A damaging leak to Fairfax Media revealed that the cabinet – and earlier its national security committee – has been deeply divided over this latter proposal, that was supported by Dutton and Prime Minister Tony Abbott.

Fairfax reported that those who spoke against the proposal were Defence Minister Kevin Andrews, Foreign Minister Julie Bishop, Attorney-General George Brandis, Agriculture Minister Barnaby Joyce, Education Minister Christopher Pyne and Communications Minister Malcolm Turnbull.

A critical question raised was: would the country to which the person was applying for citizenship be likely to accept someone suspected of terrorist activities? Australia has international obligations to avoid the situation where a person is made stateless.

Sources told The Conversation the Fairfax report was accurate, and Abbott did not deny there had been division when it was put to him at his news conference, saying “this is a cabinet that has very vigorous discussions”.

Abbott has appointed Philip Ruddock – whom he earlier sacked as chief whip – as his special envoy for citizenship and community engagement. Ruddock and a parliamentary secretary, Concetta Fierravanti-Wells, will lead “a national consultation to improve understanding of the privileges and responsibilities of Australian citizenship”.

Abbott said the legislation to deal with dual citizens would come into parliament in a few weeks. If, as a result of the consultations, the government believed there should be further legislation, that would come later.

Asked whether he wanted to deal with those with sole Australian citizenship, Abbott said: “I want to have the discussion … I am open to all mechanisms which are consistent with a free and fair and tolerant society that will help this government to keep Australians as safe as we possibly can.

"So, I am certainly open, but at this stage, I’m not flagging any particular intention by the government.”

Britain has a law under which citizenship can be revoked where the person has a legal right to access citizenship of another country, even if they have not exercised that right.

The discussion paper asks for feedback on the question: “Should the powers of revocation apply to citizens when the minister has reasonable grounds to believe that the person is able to become a national of another country or territory under their laws and where it would not leave that person stateless?”

Asked who he would consult in deciding the revoke the citizenship of a dual national, Dutton said he would rely on security assessments.

Labor has not determined its position on the planned legislation but deputy leader Tanya Plibersek said that “our first interest is in keeping people safe”.