Prime Minister Scott Morrison has ordered an expert panel, headed by former Defence Minister Dr Brendan Nelson, to review the findings of the Defence Honours and Awards Appeal Tribunal, which recommended that Ordinary Seaman Edward 'Teddy' Sheean be awarded a VC.

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Sheean's shipmates say he gave his own life to save others on December 1, 1942 by strapping himself to an anti-aircraft gun on the sinking HMAS Armidale to keep enemy planes at bay.

He was Mentioned in Dispatches, but survivors and his family have long argued that he is deserving of the nation's highest award for bravery.

Himself under fire for having rejected the tribunal's findings, Mr Morrison seems to have buckled.

The panel he has commissioned will look into whether the tribunal's 2019 review had found any significant new evidence to justify its finding and the awarding of a VC.

"Overturning a decision relating to a Victoria Cross nearly 80 years after Sheean's heroic actions in 1942 would need compelling reasons," Mr Morrison said.

"That is why the government's view and clear policy is that consideration of the awarding of a retrospective Victoria Cross would only occur in light of compelling new evidence or if there was evidence of significant maladministration."

Along with Dr Nelson, who is also the former director of the Australian War Memorial, the expert panel comprises former Solicitor-General David Bennet, former secretary of the Department of the Prime Minister and Cabinet Peter Shergold, and senior curator and historian at the NSW Anzac Memorial Brad Manera.

The panel will report to the prime minister by July 31, 2020.

"The Victoria Cross for Australia is our pre-eminent Australian gallantry decoration. The government will always uphold the integrity of the Victoria Cross and everything that it stands for," Mr Morrison said.