Terrorist plans to use liquid explosives aboard passenger airlines could lead to permanent restrictions on hand luggage on Australian international and domestic flights, the prime minister said today.

"The potential use of liquid explosives brings a whole new menacing dimension to the terrorist threat," John Howard told Melbourne radio 3AW.

"That sort of response could well be necessary," he added, referring to the potential for permanent restrictions on liquids and gels in hand luggage that could extend to domestic flights.

Australian flagship airline Qantas said higher security checks with bans on liquids and gels in hand luggage would apply only to its flights to the United States.

Howard said Australia's security level was currently under review in light of the foiled plot.

"It is a reminder sadly to all of us that terrorism is still a very live and menacing threat to the kind of existence that we've all taken for granted," Howard said.

The minister responsible for Australia's top intelligence agency, Attorney-General Philip Ruddock, said there was no evidence that anyone in Australia was planning a similar type of terror attack.

Ruddock said Australian airports had the capacity to deal with hand luggage and implement appropriate checks if intelligence suggested that was required.