The measure has been prompted by a series of high- profile cases in which convicted murderers and rapists have been returned to Britain.
Under the current legislation nothing can be done to restrict the movements of former convicts or to monitor their actions because they have completed their punishments abroad.
The latest case involves a serial sex attacker known as "The Lift Rapist" who has lived in Australia since he was 10.
Edward Godfrey, 37, could be deported to the United Kingdom next month after an Australian hearing ruled he poses a serious threat to women. He has served a 12-year sentence for rape and has 14 other convictions for violent sex attacks.
The Home Office is powerless to prevent Godfrey, who was brought up in Hertfordshire, from being sent back to the UK. He has never taken Australian citizenship and is therefore British.
The Home Office and Scottish Office are currently looking at introducing legislation forcing British offenders convicted of serious offences abroad to be returned to the UK to complete their sentences under the British legal system.
Sex criminals would automatically be placed on the Sex Offenders Register and have to report their movements and any change of address or name, to the police. Offenders would also have to be supervised by the Probation Service.
Ministers are planning to ratify the European Union Convention on the Transfer of Sentenced Persons and then bring in domestic legislation.
A Home Office spokesman said: "That would enable us to take prisoners from abroad before they finish their sentence without their consent, so they serve the remainder of their sentence in the UK."
While there are only a small number of British people being deported after committing offences abroad the seriousness of their crimes and potential for further lawlessness has seriously worried communities and the politicians alike.
In May 1997 one of Australia's most notorious serial killers, Archie McCafferty, 49, was deported to his home city of Glasgow. McCafferty, known as "Mad Dog", served 23 years in Australian jails for four murders and had once pledged to kill seven people.
Although McCafferty lived in Australia from the age of ten, after his family emigrated, he never applied for citizenship.
In the most recent case, Godfrey is to go before a parole board on 29 July. If the authorities grant him parole then the Australian government is expected to deport him to Britain within a week.Reuse content