The federal government is putting aside one of the national security reforms most keenly sought by spies and police, in which phone and internet providers have to keep customers' records for up to two years.

A senior source said the government was ''not proposing'' a so-called data-retention scheme ''at this stage'', despite a strong push by the government to beef up intelligence and counter-terrorism capabilities over concerns about Australian jihadists abroad.

Preparing to introduce legislation that will expand ASIO's surveillance powers: Attorney-General George Brandis. Credit:Glenn Hunt

Britain is going ahead with data-retention laws that would force internet providers to store information such as the time and destination of phone calls, text messages, emails and Skype calls for up to a year.

The Australian Security Intelligence Organisation and the Federal Police have been calling for similar laws to have records kept for up to two years.