Some 500 radicalised Britons are estimated to be fighting in Iraq and Syria, both of which are facing a major offensive from the Islamic State (IS) militant group.
"We will shortly be introducing our own new Counter-Terrorism Bill in the UK," Cameron said in a speech to Australia's parliament before travelling to the G20 leaders' summit in Brisbane, adding that there was 'no opt-out from dealing with this'.
"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."
British media reports said the legislation, to be introduced in parliament this month, would block individuals from returning from Syria and Iraq to Britain for at least two years unless they comply with strict measures.
These could include being escorted back to Britain and then facing prosecution, bail-style reporting conditions and deradicalisation courses.
Border guards and airport police would also be given new powers to seize passports from those they suspect of planning to travel abroad for terrorism, the reports said.
Australia is facing a similar scenario to Britain with at least 73 of its nationals having their passports cancelled to prevent them travelling to Iraq and Syria, as concerns mount that they could return home and commit violence.
At least 71 Australians are currently fighting in the two nations, the government says. At least 15 have been killed -- two of them as suicide bombers -- and Canberra recently passed a law criminalising travel to terror hotspots without good reason.
Britain raised its terror threat risk level to 'severe' in September -- meaning an attack is thought 'highly likely' -- due to fears over the situation in Iraq and Syria.
But Cameron said that as well as handling the extremist threat, the root cause must be dealt with.
"And let's be frank. It's not poverty, though of course our nations are united in tackling deprivation wherever it exists," he said.
"It's not exclusion from the mainstream. Of course we have more to do, but we are both successful multicultural democracies where opportunities abound.
"And it's not foreign policy. No, the root cause of the challenge we face is the extremist narrative. So we must confront this extremism in all its forms. We must ban extremist preachers from our countries. We must root out extremism from our schools, universities and prisons. As we do so we must work with the overwhelming majority of Muslims who abhor the twisted narrative that has seduced some of our people," he said.
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