Wolfgang Schaeuble said officials will draw up new legislation and an amendment to the constitution after the country's supreme court rejected an earlier air-safety law, the Saechsische Zeitung newspaper reported.
Shooting down hijacked passenger planes could be justified if the threat to Germany was considered severe, Schaeuble said, according to the paper. "In the case of Sept. 11, the shooting down (of the hijacked planes) would have been necessary as well as legally admissible," he was quoted as saying.
The Federal Constitutional Court struck down the 2005 air safety law in March, saying authorities had no right to kill innocent civilians. It also found that allowing the military to shoot down civilian airliners violates a constitutional bar on the military being deployed for domestic security.
With reference to the latest alleged plot to blow up passenger planes taking off from Britain, Schaeuble said Germany also faces a growing threat from suicide attackers, according to the report.
"We must recognize that there are also here more such people than we can imagine who are ready to sacrifice their own lives in madness or as fanatics," he was quoted as saying.
Also Wednesday, the Interior Ministry said officials will next week begin finalizing plans for a national database on terror suspects, despite a dispute over whether individuals' religious affiliation should be included.