IS recruits will be banned from UK for two years

The legislation will block individuals from returning from Syria and Iraq to the UK for at least two years unless they comply with strict measures, which could include being escorted back to Britain and then facing prosecution, bail-style reporting conditions, deradicalisation courses or subjection to Terrorism Prevention and Investigation Measure orders (Tpims).

Border guards and airport police are to be given new powers to seize passports from individuals who they suspect of planning to travel abroad for terrorism. And the power will be extended to under-18s in response to fears of indoctrinated British teenagers going to the Middle East to volunteer for terror gangs.

During the first few months of this year, the highest proportion of Britons travelling to Syria and Iraq to fight were aged between 16 and 21.

Airlines will be ordered to comply with a "no-fly list" of individuals barred from travel to the UK because of suspected involvement in terrorist activities and to use interactive electronic data systems capable of receiving instructions to offload or to screen any passenger. Any airlines which bring banned individuals into the country could face civil penalties, including the removal of the right to land in the UK.

Mr Cameron was due to announce the proposals in a speech to the Australian Parliament in Canberra, with the aim of making them law by the end of January.

The plans have been agreed with the Liberal Democrat side of the coalition Government following intensive negotiations after they were first outlined by Mr Cameron to the House of Commons in September in response to concerns that more than 500 UK citizens have been recruited by IS - including the notorious "Jihadi John" who is believed to be responsible for the murders of beheaded aid workers Alan Henning and David Haines.

Notably absent from the package are measures to beef up Tpims to allow the state to dictate where in the UK individuals subject to an order may live, which raised Lib Dem hackles when floated by the PM.

Mr Cameron's proposals are likely to spark legal wrangles, with opponents expected to argue that the cancellation of passports of Britons fighting overseas would render them stateless in contravention of international law. Former attorney general Dominic Grieve warned in September that "even taking such powers on a temporary basis is likely to be a non-starter".

But Downing Street sources indicated that the measures had been given the green light by Mr Grieve's successor Jeremy Wright. They pointed out that individuals losing their passports would retain their UK citizenship and would be permitted to return to Britain, but only if they complied with stringent conditions.

Any attempt to sneak back into the UK clandestinely after passport cancellation would be punishable by up to five years in prison.

Home Secretary Theresa May already has the power under royal prerogative to approve the seizure of passports of Britons suspected of travelling abroad for terrorist purposes, and it is thought to have been used around 24 times in the past year.

But the new measures would allow Border Force officers or police at airports and ports in the UK to use their own initiative - subject to approval from a senior officer - where they have "reasonable suspicions". Passports could be temporarily withdrawn for 30 days, with a magistrate's review after a fortnight, and individuals who try again to leave the country could have their passport withdrawn repeatedly and find themselves placed on no-fly lists.

Downing Street said that the package would "significantly strengthen our armoury" in tackling the problem of foreign fighters, giving Britain the toughest system in the world after the USA.

Addressing the Australian Parliament in the early hours of Friday, Mr Cameron will argue that the UK and Australia need to stand up together for their shared democratic values to defeat the terrorist threat posed by IS.

And he will praise Australian prime minister Tony Abbott for "giving a strong international lead" on the issue, with a speech to the UN Security Council and the passage last month of a Foreign Fighters Act, which threatens Australian citizens who travel to "no-go zones" in the Middle East with prison unless they can explain their presence there.

Mr Cameron was due to say: "We have to deal with the threat of foreign fighters planning attacks against our people.

"We will shortly be introducing our own new Counter-Terrorism Bill in the UK.

"New powers for police at ports to seize passports, to stop suspects travelling and to stop British nationals returning to the UK unless they do so on our terms.

"New rules to prevent airlines that don't comply with our no-fly lists or security screening measures from landing in the UK."

The international terror threat will be on the agenda, alongside trade, growth and infrastructure investment, at this weekend summit of the world's 20 leading economies in Brisbane.

But the gathering is also likely to be dominated by tensions over Ukraine and tax avoidance.

Mr Cameron has vowed to confront President Vladimir Putin over Russia's interference in Ukraine, warning him not to plunge the world into a new Cold War.

And he is also expected to wade into the row over allegations that European Commission president Jean-Claude Juncker encouraged tax avoidance as prime minister and finance minister of Luxembourg.

Mr Juncker, who denies the allegations, has insisted that there is no conflict of interest in him remaining in post while the European Union looks at his country's tax arrangements.

But he faces an awkward summit, with many of the G20 leaders - including Mr Cameron - committed to action against tax havens. The British PM is thought likely to stress plans for greater international tax transparency on which he secured agreement at last year's G8 summit in Northern Ireland.

Luxembourg, Malta and Ireland are already being investigated as part of an EU crackdown on multinational corporations' tax arrangements, but a new media report last week said companies appeared to have "channelled hundreds of billions of dollars through Luxembourg and saved billions of dollars in taxes".

Mr Juncker, who served as Luxembourg's finance minister from 1989-2009 and prime minister from 1995-2013, said on Wednesday that he would "regret" it if the country's tax measures had led to non-taxation, but added: "Everything that has been done has been in compliance with national legislation and international rules that apply in this matter."