Donations to environmental groups such as Greenpeace, the Wilderness Society and Friends of the Earth could be stripped of their tax deductible status under sweeping changes put forward by members of the Turnbull government.

The proposals prompted claims by the environment movement and federal opposition that members of the Coalition were mounting an "anti-democratic" attack on free speech and were singling out those advocating for the protection of nature and the climate.

In a report released on Wednesday, a long-running parliamentary committee inquiry headed by government MPs recommended a rule that would mean green groups losing their tax deductibility status for donations unless each year they spend at least a quarter of the money they receive on "environmental remediation works" such as as tree plantings.

That recommendation prompted one government member, Victorian Liberal MP Jason Wood, to break from his Coalition colleagues and express concern that groups that focused on education and advocacy for environmental causes would be unfairly penalised.