The government said the Coalition's plan was being driven by the National Party.

The Opposition Leader said yesterday his proposal, outlined in a discussion paper, was designed to tell the public how much Australian land and agri businesses were being purchased by overseas buyers.

''I want to make it absolutely crystal clear that the Coalition unambiguously supports foreign investment in Australia, we need it, we want it,'' he said.

''All we are saying with this paper is that there needs to be a sufficient level of scrutiny … so that the public has total confidence that the foreign investment that Australia wants and needs is in Australia's national interest.''

Former Liberal minister Peter Reith reportedly said the plan was ''just crazy, stupid politics''.

Mr Reith, who has recently set up a farm with Angus cattle in Victoria, said earlier this week that proposed changes to the board would damage Australia's international reputation and discourage foreign investors.

On Twitter yesterday he posted: ''Pandering to populism is contrary to public interest.''

The suggestion of a tougher policy is widely seen as a National Party-inspired move to counter the growing influence in Queensland of the party headed by independent Bob Katter which is taking a hard line on foreign investment.

Mr Abbott has flagged a national register to keep track of foreign property investments - a change sought by peak farm organisations - and more transparency to ensure would-be buyers disclose any government involvement.

The Coalition's proposal is that foreign land purchases worth more than $15 million would require approval by the Foreign Investment Review Board (FIRB), a dramatic reduction from the current trigger of $244 million.

The board would also be required to investigate proposed foreign takeovers of agricultural businesses worth more than $53 million.

All foreign investors would be required to disclose direct or indirect ownership or funding from foreign governments.

Nationals Senate leader Barnaby Joyce, a critic of foreign investment, was involved in developing the discussion paper.

Nationals leader Warren Truss said Senator Joyce was happy with the final discussion paper.

Mr Truss said many Australians did not put a high enough value on agricultural land. ''Rarely are they at the front line to acquire industries and agricultural land when it's on the market,'' he said.

Trade Minister Craig Emerson said there had been a negligible rise in foreign ownership but the Coalition was suggesting there was a crisis. ''What the Coalition is seeking to do is misinform people, prey on their fears and then send a very clear signal to China in particular, that foreign investment from China is unwelcome,'' he said,

''This is hysterical nonsense … it is just economic nationalism or worse, economic Hansonism.''

Dr Emerson pointed out that the FIRB already had a screening threshold of zero for proposed investments by foreign state-owned enterprises.

''I don't know how you drop a zero threshold below zero … these are crazy people,'' he said.

The government has proposed a working group to consult on developing a foreign ownership register.

National Farmers' Federation president Jock Laurie welcomed the Coalition's proposal for a national land register.