Scott Morrison will move to establish a federal anti-corruption commission, less than a month after dismissing the proposal as a “fringe issue”.

But the Coalition’s proposed integrity commission will operate outside of public view, with the investigative body to make no public findings, hold no public hearings, and refer any recommendations directly to prosecutors, who will make the ultimate decision on whether or not to go forward with a case.

A former commissioner of the New South Wales independent commission against corruption described the omission of public hearings as “very weak”.

Labor announced it would establish a national commission in January. But there are clear differences between the two proposals. While the Coalition is putting forward a model of an independent statutory body to be led by a commissioner, and two deputies, it will operate away from the public eye. Labor’s proposal has discretion for public hearings, when judged to be in the public interest, built in.

Morrison said the government was seeking to avoid its body being used as a political tool or a “plaything” for those with an agenda.

Guardian Australia reported last month that the attorney general, Christian Porter, had been working on a proposal to convert the Australian Commission for Law Enforcement Integrity into a federal anti-corruption office under Malcolm Turnbull’s stewardship.

It is that model Porter and Morrison announced on Thursday.

“The Commonwealth Integrity Commission would have two divisions – a law enforcement integrity division and a public sector integrity division,” Porter said.

“So there would be a law enforcement integrity commissioner, a public sector integrity commissioner and an overarching commonwealth integrity commissioner.”

“It is an investigative body, with serious investigative tools, that is well-resourced, specialised and the peak body for building briefs against people who have acted corruptly and moving those briefs to the DPP.

“So this is not a show-trial body.”

The government had long resisted the creation of a federal body. Outspoken backbencher and former prime minister Tony Abbott described it as a “very, very bad idea” earlier this year. But the Coalition was moved to act following shifts in public sentiment, and subsequently, in the party room.

“This is a real proposal, with real resources, real teeth,” Morrison told reporters in Sydney on Thursday.

Porter denied it would be a “secret body”.

“An investigative body necessarily investigates in a non-public way, which is very different from operating in secret,” he said.

“But where is justice done in circumstances where someone is investigated by a body pursuant to rules of evidence which no one here would accept are orthodox and then simply makes a finding against that person and, for instance, in many matters here in NSW has had those findings overturned by the high court.

The former NSW Icac commissioner David Ipp welcomed the announcement as a “step forward”. But Ipp, who previously sat as a judge in NSW’s highest court, expressed serious concern about the lack of public hearings, and said the power of the agency would depend on the limits of its jurisdiction, and its resourcing.

“This is a step forward but I think the omission to allow public hearings is very weak,” Ipp told Guardian Australia. “It reduces significantly the commission’s ability to expose public corruption and gain the trust of the people.”

He said he held “some scepticism” about the government’s genuine desire to create a strong integrity commission, given the “attorney general’s previous comments on the issue”.

“It is very easy to create a commission that, on its face, will placate the public’s demands for an Icac-like body, but which in reality will be a fangless institution, the task of which will be to create a mirage of having an anti-corruption institution which in truth will do little to disturb the status quo,” he said.

“That will occur if the commission lacks the necessary powers, funds and professional and dedicated staff. One can see that with the anti-corruption agencies in South Australia, Tasmania and to a major extent in Victoria.”

Anti-corruption campaigner and former NSW supreme court judge, Anthony Whealy, said the model, while welcome, suffered from significant shortcomings. Whealy criticised the decision not to allow retrospective investigations. He said the decision to allow public hearings for law enforcement but not politicians and public servants was “crazy”.

“I can’t see why you would possibly draw that distinction,” Whealy said.

“It means that parliamentarians are not going to be involved in a public hearing. whereas police officers will be. That’s silly. I think that’s just crazy.”

Requiring “reasonable suspicion” of corruption before launching an investigation would also limit the commission’s effectiveness, he said.

“You should be able to get an anonymous phone call to say there’s talk about a fellow named Eddie Obeid... you should be able to act on that information, you don’t need the threshold,” he said.

The independent MP Cathy McGowan introduced a private members’ bill on behalf of the crossbench in the last sitting week, which Porter described as overreach, using the example of the complaint made against ABC political editor Andrew Probyn’s description of Abbott as the “most destructive politician of his generation”.

“Under this bill before the House, no ifs and no buts, Andrew Probyn would be found to have committed corruption,” Porter claimed in November. “Misdrafting can have such a massive overreach in this area.”

On Thursday, Porter was at pains to make clear the government was not following Labor’s lead and instead indicated “a sober, cautious, detailed process, which asks two questions; is such a body able to make integrity better rather than worse at the commonwealth levels? And how does that body operate inside an already relatively well-functioning structure?”

Under the draft proposal, the public sector division will cover government departments, agencies, MPs and their staff, as well as the staff of judicial officers and contractors.

The existing Australian commission for law enforcement integrity would be made the law enforcement integrity division, able to investigate other government agencies, such as the ATO, the ACCC and Asic.

Amendments would be made to the criminal code, for new corruption offences able to be investigated by the body, once the consultation process is concluded.

Labor had committed to introducing a national anti-corruption body within the first 12 months of its government, having announced its draft earlier this year, with a promise to consult before presenting the final proposal.