The proposals would expand the points-based immigration process
People who want to become British citizens could speed it up by becoming active members of political parties and trade unions, under government plans.
Migrants would have to earn points for citizenship under the new system rather than getting an automatic right to apply for citizenship after five years.
They could also lose points for "bad behaviour" which it has been suggested could include anti-war demonstrations.
The Conservatives dismissed the plans as "pure spin".
Migrants who have worked in the UK for five years have had the automatic right to apply for a British passport, which, immigration minister Phil Woolas told the BBC, was usually granted.
But in future, under the measures in the Borders, Citizenship and Immigration Act, migrants will have to spend five years as temporary residents, before becoming "probationary citizens".
They can then earn full citizenship by earning points - a process which is expected to take between a further one and five years.
A consultation document published on Monday seeks views on how those points might be earned.
It suggests that volunteering and "civic activism" - such as being a school governor or "contributing to the democratic life of the country through trade union activities or canvassing for a political party" - could reduce the process from three years to one.
Refugees and spouses of migrants already in the UK will have their points assessed on "the basis of their continuing family relationship or protection needs".
But economic migrants would face a new points test, which would take into account the UK's economic needs.
The government suggests extra points could be earned by those who head to Scotland, or other areas "in need of further immigration".
Earning potential, special artistic or scientific skills, qualifications, occupations and English language abilities could also be rewarded.
There may also be a new test, in addition to an existing test on life in the UK, on "more challenging topics such as the historical and political context at the British citizenship stage".
Workers could also earn points towards British citizenship by temporarily taking skills back to their country of origin, to help tackle a "brain drain" of talented workers from developing countries.
Points could be lost by those where "an active disregard for UK values is demonstrated", the government suggests.
Amid reports that could include taking part in protests at soldiers' homecoming parades - Mr Woolas told the BBC he did not want to comment about "specific instances".
He added: "But if someone is applying to be a citizen to our country we do think that you should not only obey the law but show you are committed to our country.
"This is what America does, it is what France does, it's what other countries do and we think we should do the same."
But Conservative immigration spokesman Damian Green said there had never been an automatic right to citizenship.
He added: "It is simply that this government that has let an unprecedented number of people obtain citizenship, issuing someone with a British passport every five minutes.
HAVE YOUR SAY
I'd imagine that half the native population would fail their own citizenship test
Leanne B, Nuneaton
"This is an act of desperation by a government that knows it has let immigration run out of control for more than a decade."
Chris Huhne for the Lib Dems said it would only deal with legal migration and accused the government of having "no idea how to deal with the hundreds of thousands of illegal immigrants living here".
The report notes that migration is "the main component in the UK's rising population" adding that in order to manage population growth "it must strengthen mechanisms to control who is allowed to stay in the UK on a permanent basis".
Sir Andrew Green, of campaign group Migrationwatch UK, said: "After years of denial, the government has at last recognised that immigration is the main component of population growth."
He said the change was "an important step forward as it will allow us to draw on foreign skills without adding yet more to our population".
A points-based scheme is already in place for migrants from outside the EU applying to work or study temporarily in the UK.
Mr Woolas told the BBC applying those principles to citizenship would be better for migrants and Britain.