* Australia proposes sweeping new citizenship powers

* Proposal follows spate of lone wolf attack

* Changes expected to face High Court challenge

SYDNEY: Australian nationals convicted of terror offences would be stripped of their citizenship if the government believes they are entitled to apply for residency from another country, Prime Minister Scott Morrison proposed on Thursday.

Australia, a staunch US ally that sent troops to Afghanistan and Iraq, has seen a spate of attacks by home-grown militants in recent months, including a stabbing attack in the country's second largest city less than two weeks ago.

Morrison proposed allowing the government to weaken current constraints that permit terror convicts to be stripped of their Australian citizenship only if they are already dual nations and they have been sentenced to more than six years in prison.

"This is something that can't be tolerated, and for those who would engage in this sort of activity, and they have citizenship elsewhere or we have reason to believe they do, they can go," Morrison told reporters in Sydney.

Morrison's proposal will require approval from the country's parliament, where the government does not enjoy a majority.

It is also likely to face legal challenges, experts said.

"It is not clear that the commonwealth has the power to kick out people who have been here for many, many generations," said Sangeetha Pillai, constitutional lawyer at the Kaldor Centre, University of New South.

"This legislation would make some people stateless at least temporary and in some cases, permanently."

Morrison's policy proposal comes just days after Australian police arrested and charged three dual nationals with plotting a mass attack on the public in Melbourne.

Despite the arrests nullifying the threat from this group, Australia continues to be on heightened alert for future attacks.

Australia currently sees the likelihood of a militant attack as "probable", the midpoint on a five-level threat ranking system. It has been set at that level since the system was introduced in 2015.

Keen to give investigators added tools, Morrison demanded parliament pass legislation that would compel technology companies provide access to encrypted messages before 2019.

Seen as test case as other nations explore similar laws, Facebook Inc, Alphabet Inc and Apple Inc have jointly began lobby lawmakers to amend the bill.