A government-controlled parliamentary committee has rejected tough new English language rules at the heart of Immigration Minister Peter Dutton's proposed citizenship crackdown, warning they could prevent migrants who went on to become valuable members of the community from settling in Australia.

In the report, tabled in Parliament on Tuesday night, the Senate committee rejected several elements of the package, which already appeared doomed in its current form.

The proposal, which passed the lower house, would introduce a four-year waiting period for permanent residents before they can apply for citizenship, tough English language requirements and a test on "Australian values".

While the committee recommended the package be passed in the Senate – albeit with key measures wound back – the legislation looks set to fail, with the Nick Xenophon Team telling Fairfax Media it would block the bill as it stood.