Australia's psychiatrists are urging the government to lift the ban on nicotine-containing electronic cigarettes, saying their mentally ill patients, many of whom are heavy smokers, could "significantly benefit" from the devices.

In a submission to the federal government's e-cigarette inquiry, the Royal Australian and New Zealand College of Psychiatrists (RANZCP) said the mentally ill were more likely to smoke and be heavy smokers, cutting their life expectancy by 20 years compared to the general population.

"E-cigarettes ... provide a safer way to deliver nicotine to those who are unable to stop smoking, thereby minimising the harms associated with smoking tobacco and reducing some of the health disparities," it said.

"The RANZCP therefore supports a cautious approach that takes into account ...the significant health benefits which these products present."

The submission marks the first time a specialist medical college or major health group has broken ranks with Australia's medical fraternity, which largely wants the ban on e-cigarettes maintained because their safety and efficacy as quitting aids are unclear.

It is legal to buy "vaping" devices", but it is unlawful to sell, possess or use nicotine-containing ones as the addictive chemical is classified as a poison.

This year the Therapeutic Goods Administration rejected an application to exempt the drug from the dangerous poisons list.

Professor David Castle, RANZCP board member, said the current restrictions on tobacco were not helping people with mental illness and e-cigarettes needed to be made available, albeit "with caveats".

Seventy per cent of people with schizophrenia and 61 per cent of people with bipolar disorder are smokers, compared to 16 per cent of those without mental health problems, studies show.

"It's not like we've banned cigarettes, they're available and legal, but there are restrictions, and we would go with similar restrictions for e-cigarettes," he said.

"The literature shows the risk of cancer is much reduced with e-cigarettes because what actually raises that risk are the aromatic hydrocarbons and other things within the paper and the tobacco.

"We're talking about nicotine as a chemical substance released in a vapour form, so it's a very different scenario."

Dr Colin Mendelsohn of the University of New South Wales, who supports e-cigarettes, couched RANZCP's position as being in "sharp contrast" to the Australian Medical Association's (AMA) "prohibitionist view".

He said the RANZCP had looked at the evidence and decided to "breakaway", marking "the beginning of a shift in the debate".

"The AMA's position paper was a disgrace, I was embarrassed; they ignored all the international evidence, that New Zealand and Canada have looked at the evidence and decided to make e-cigarettes legal," he said.

Dr Michael Gannon, president of Australian Medical Association, dismissed Dr Mendelsohn's commentary, saying RANZCP had interpreted the evidence differently and based its views on its patients' specific needs.

"The AMA takes a more population health view of the issues and worries significantly about the normalisation of vaping and the evidence that suggests it represents a gateway drug to heavier use of tobacco," he said.

"RANZCP, representing doctors in two countries, has carefully looked at the evidence and come up with a different view, which recognises the needs of their patients."

Michael Moore, president of Public Health Association of Australia, doesn't see RANZCP's move as a major breakaway.

"At no stage did they say we should override the TGA's decision; they expressed serious concerns about how to handle the harms associated with e-cigarettes and they want to minimise supply and demand."