The government's anti-terrorism legislation has come under heavy criticism from a cross-party committee of privy councillors.

In particular, MPs and peers argued that a clause of the 2001 Anti-Terrorism, Crime and Security Act authorising the detention of suspects without charge should be reviewed "as a matter of urgency".

That aspect of the bill, passed in the immediate aftermath of September 11, has recently been described as creating "a Guantanamo Bay in the UK" by human rights groups.

"We consider the shortcomings...to be sufficiently serious to strongly recommend that the Part Four powers which allow foreign nationals to be detained potentially indefinitely should be replaced as a matter of urgency," said the report.

"Given the novel and contentious nature of these powers, we believe that there should be a continuous pro-active effort to manage the individual cases of the suspects with a view to finding alternative ways of dealing with them (such as finding evidence that would support a prosecution).

"We were, therefore, surprised to learn that the authorities appear to have given no thought to what change in circumstances might lead them to conclude that an individual should be released or dealt with differently."

Lord Newton of Braintree's committee argued that, wherever possible, suspects should be held under normal criminal law.

Individuals could be deported without breaking the United Nations Convention on Human Rights, as has been successfully done in other European states, the committee concluded.

"We have found no obvious reason why the UK should be the exception," said Lord Newton.

"While this power has not been used injudiciously or excessively, it raises difficult issues of principle and it does not meet the full extent of the threat. For example, it does not deal with British nationals."

The committee also criticised the emphasis placed by the Home Office on the involvement of foreign nationals in al Qaeda.

"The threat from UK citizens is real," the report found. "We have been told that, of the people of interest in international terrorism, nearly half are British nationals."

However home secretary David Blunkett immediately moved to defend the legislation.

"My first duty as home secretary is to protect the citizens of the United Kingdom. I continue to believe that the Act is a key element in securing that," he said.

"Nonetheless, I will look carefully at the report's detailed recommendations. Many of the detailed points about the use of the detention powers were fully debated when the bill went through parliament."

Blunkett said he had never pretended the emergency powers were ideal, but added that he viewed them as "the best and most workable way to address the particular problems we face".

"I fail to see how the public would be adequately protected by electronic tagging, as the committee has recommended, from those whom SIAC has confirmed are international terrorists," he added.

"Not least because communication and organisation are as crucial here as custodial security in a physical sense.

"The committee has used the provisions within the Act to specify that the whole of the Act be considered when we come to debate its renewal."