Charity bosses last night welcomed radical government proposals for an overhaul of charity law.

The report, published by Tony Blair's Strategy Unit, called for radical new types of charities and social enterprises, better information for the public and modernisation of the role of the Charity Commission.

It also calls for a new definition of charities - with a 10 point checklist to define good causes.

As part of the package of reform, the public will be able to get clearer information about larger charities' effectiveness, performance and financial position through a new Standard Information Return.

The government also plans to establish an independent body to oversee good practice in fundraising.

To set small charities free from the burden of red tape, the threshold for charity registration is to be increased from £1000 to £10,000.

The report also calls for the Charity Commission to be opened up to greater scrutiny.

The Commission will have to report to parliament on new statutory objectives and will hold open board meetings in future.

Tony Blair welcomed the report, saying he hoped it would strike the right balance. "Wise governments respect the crucial independence of the sector. But government has an important role to play in providing support," he said.

"This report sets out a package of measures which will modernise the law and enable a wide range of organisations to be more effective and innovative, whilst maintaining the high levels of public trust and confidence which are vital to the continued success of the sector.

"The report is issued as a consultation document. Over the next three months, there will be time to comment on the analysis and the proposals in this report. We want to work with the sector and hope to hear views from the widest possible range of people and organisations."

Charity bosses gave an initial thumbs-up to the report. Shirley Scott, head of the Charity Finance Directors' Group, said: "We are delighted that the government has recognised the problems of regulation and red tape.

"There is a long way to go but we will push for the legislation relating to charities and trading and support the proposal for the new Charitable Incorporated Organisation."