Australia Thursday moved to introduce a legal right to privacy after the phone-hacking scandal in Britain, paving the way for people to sue media organisations for serious breaches.

Laws are already in place to deal with criminal offences related to privacy breaches, but not a statutory cause of action.

Home Affairs Minister Brendan O'Connor said he was acting now after the News of the World furore heightened concerns.

"Right now there is no general right to privacy in Australia, and that means there's no certainty for anyone wanting to sue for an invasion of their privacy," said O'Connor, whose government is in a running battle with some Murdoch-owned publications.

"The News of the World scandal and other recent mass breaches of privacy, both at home and abroad, have put the spotlight on whether there should be such a right."

Rupert Murdoch was grilled by British MPs this week over the outcry that saw him close British tabloid News of the World and dump his bid for satellite broadcaster BSkyB over the hacking of phones.

O'Connor said Canberra would seek the views of the public immediately on introducing a right to privacy, and take it from there.

"This government strongly believes in the principle of freedom of expression and also the right to privacy. Any changes to our laws will have to strike a balance between the two ideals," he said.

"Privacy is emerging as a defining issue of the modern era, especially as new technology provides more opportunities for communication, but also new challenges to privacy."

The move comes a day after Prime Minister Julia Gillard warned Murdoch's Australian arm it faced some "hard questions" as calls intensify for a media inquiry following the explosive News of the World furore.

It follows senior ministers lashing out at Sydney's Daily Telegraph newspaper, accusing the Murdoch-owned daily of being intent on bringing down the government.

Murdoch controls about two-thirds of Australia's regional and metropolitan newspapers, has a stake in broadcasters Sky News and Fox Sports, and is angling to run the Australia Network, the international public TV channel.

The company has denied it has an agenda or has been involved in any wrongdoing, with News Limited chief John Hartigan calling Gillard's comments "unjustified and regrettable".