The Dutch justice ministry says it will reinforce the right of journalists to protect sources, after a European court ruling demanded extra safeguards.
The European Court of Human Rights in Strasbourg said an independent judge, not a prosecutor, should decide whether a source should be divulged to police in the public interest.
The judges found fault with an order that a Dutch magazine, Autoweek, hand over pictures of an illegal car race.
It was seen as a media test case.
The magazine's editor was arrested after refusing to surrender a CD-Rom containing pictures of the illegal race, which took place in 2002.
The magazine, owned by publishers Sanoma Uitgevers BV, then handed over the CD under protest.
Police wanted the CD because they suspected one of the cars had been used by a gang that broke into a cashpoint machine and threatened a bystander with a gun.
The Strasbourg judges ruled that Dutch law was "deficient in that there was no procedure with adequate legal safeguards... to enable an independent assessment as to whether the interest of the criminal investigation overrode the public interest in the protection of journalistic sources".
The Dutch justice ministry says it has prepared a bill that will expressly allow journalists to protect sources. It will also have a judge - not an investigating officer or prosecutor - decide whether a demand to reveal sources is reasonable.