Armed officers and military units could enforce the cordons following a biological or chemical attack.
Specialist teams based at railway stations and key road junctions would prevent people leaving and spreading infection, according to The Sunday Times.
Police can already clear buildings under anti-terror laws introduced before September 11.
But officers may be granted powers to impose the “health cordons” as part of the government’s forthcoming “civil contingencies” bill.
A Cabinet Office spokeswoman confirmed that ministers are considering the move.
The spokeswoman stressed there were no plans to give police new powers to use force.
Officials reportedly believe a major show of force by specially-equipped police and emergency units would minimise any need for the use of force.
The Ministry of Defence confirmed a 7,000-strong civil contingency reaction force would have the option of carrying arms.
Drawn from military reserve forces, primarily the Territorial Army, 500-strong forces will be deployed at 14 centres across Britain in the New Year. London will see a test run of its ability to cope with an attack in the New Year, the Cabinet Office confirmed.
The exercise will involve emergency services and hospitals. It is designed to ensure new systems put in place in the wake of September 11 could cope with a real strike.
Liberal Democrat spokesman Edward Davey said the “draconian” measures could only be justified if those who might find themselves inside a cordon knew they were being treated properly.
“Ministers will have to explain where the resources for these emergency units are coming from,” he said. “The current bargain basement approach to civil defence measures will not stretch to these plans.
“The public must be reassured people cordoned off will get the help they need.”