Govt names DMO review panel

Former Rio Tinto boss David Peever will head a review that could lead to the privatisation of a key defence agency.

The government is weighing up the merits of selling off the Defence Materiel Organisation, or merging it into the department.

Defence Minister David Johnston said Mr Peever would lead a review panel that would include former army chief Peter Leahy, former ministers Robert Hill and Lindsay Tanner and experienced defence industry figure Jim McDowell.

Senator Johnston said the First Principles Review Team would improve the efficiency of Defence while ensuring value for money.