Australia is poised to reverse its opposition to becoming a member of the new China-led Asian Infrastructure Investment Bank (AIIB), a newspaper reported on Monday.

China and dozens of other nations have agreed to set up the Beijing-based bank by the end of the year to fund rail, road, power and other projects.

The United States opposes the plan, citing concerns over transparency and corporate governance in China.

Australia initially took a similar line.

But Prime Minister Tony Abbott has reassessed his position, The Australian newspaper reported, days after US ally Britain said it would seek to join the AIIB.

Abbott saw the regional potential of the bank and is more confident that China will pledge to respect the institution's multilateral nature, the report said.

In the exclusive interview, Abbott was quoted as signalling he did not want Australia to be isolated on the issue.

"We're looking very carefully at this and we'll make a decision in the next week or so," Abbott was quoted as saying.

"I would like to think that it is possible for this to be a genuinely multilateral institution and I think it could well be an important part of bringing China fully into the international community."

The G7 advanced economies were still discussing participation in the AIIB when Britain broke ranks.

The White House criticised London's decision, saying it reflected a "trend toward constant accommodation of China."

Beijing said Washington's opposition reflected its "childish paranoia towards China."

The Australian said Federal Treasurer Joe Hockey was among the few in Abbott's cabinet to initially back participation.

Abbott denied in October that Washington had asked him not to sign up to the AIIB.

China and 20 other Asian nations agreed to set up the bank in October. Six more nations have since applied to join.

The deadline for founding membership is at the end of this month.

The countries are expected to establish the AIIB formally by the end of this year with initial capital of some 100 billion dollars, about half of which could be provided by China.

India, Pakistan, Malaysia, Bangladesh, the Philippines and Thailand are among the founding nations.

China said the bank would be an "open, inclusive institution" and admit more members.