Prime Minister Tony Abbott is considering a proposal from Communications Minister Malcolm Turnbull to relax media ownership laws, a decision expected to trigger major media mergers if approved.

Mr Turnbull this week sent a policy recommendation to Mr Abbott's office to scrap the so-called "two out of three" rule and the "reach" rule.

Communications Minister Malcolm Turnbull believes media ownership laws have become obsolete in the digital age and should be removed. Credit:Alex Ellinghausen

The "two out of three" rule restricts media companies from controlling more than two out of three platforms in any market across newspapers, television and radio.

The rule prevents potential deals such as Fairfax Media merging with Seven West Media or Nine Entertainment Co.

