Interior Minister Jose Antonio Alonso wants the law to control what can be said to congregations in Spain’s mosques and churches.
Spain’s recently elected Socialist government is looking for new ways to combat militant Islamic extremism.
An extremist group is the main suspect in the Madrid bombings of 11 March.
Mr Alonso has proposed establishing a register to control religious activities, both Muslim and Roman Catholic.
Mr Alonso says the register would identify who was responsible for leading worship and the type of worship to take place.
The religious leader of Madrid’s mosque has welcomed the idea.
In an interview published in El Mundo newspaper, Mr Mahmoud says it would be good for the government to know what certain clerics were saying to their congregations.
The leader of Spain’s biggest mosque says there are extremists preaching to the Islamic community and he believes the government needs to stop them.
‘Return to censorship’
But attempts to limit religious freedom strike a sensitive chord in Spain.
In addition to the country’s more than half a million practising Muslims, 30 million Spaniards identify themselves as Roman Catholic.
The opposition Popular Party and leading Roman Catholic bishops are against any attempts to curtail religious freedom.
The archbishop of Seville, Carlos Amigo, says the minister of the interior’s proposals are a return to the days of censorship under the Franco dictatorship.