Hundreds of people wrongly stopped and searched by police could sue for compensation, following revelations of police abuse of the powers.
Police need ministerial approval for the granting of random stop and search powers under section 44 of the Terrorism Act 2000.
The powers – which allow officers to stop individuals without suspecting them of a crime – have to be renewed every month but a number of critical errors in the procedure have emerged.
Police are now in the process of contacting all those who were searched and they could be entitled to compensation.
Baroness Neville-Jones, the Security Minister, said she was “very concerned” by the errors and said a review of counter-terrorism legislation would be published “as soon as possible”.
“To maintain public confidence in our counter terrorism powers, it is absolutely crucial all those responsible for exercising them do so properly.
“I take these matters extremely seriously and have instructed the Department to conduct an urgent review of current procedures to ensure that errors can be prevented in future.”
Scotland Yard blamed the Home Office for failing to give the correct authorisation for one operation that resulted in the illegal stop and search of hundreds of individuals.
The illegal searches go back as far as 2001 and involved thousands of people.
The forces involved are: the Metropolitan Police, North Yorkshire, Hampshire, Bedfordshire, Essex, Greater Manchester, Fife, South Wales and Thames Valley.
Police powers to stop and search have been extremely controversial.
In January the European Court of Human Rights said random stop and search breached the right to privacy but the Home Office is appealing.
Corinna Ferguson, a lawyer at human rights organization Liberty, acted in the successful challenge to section 44 in the Court of Human Rights. She said:
“We are grateful to the Government for making these blunders public but they merely highlight the ongoing dangers of secret stop and search authorisations. This is one of many objections to a power that has been found unlawful in the Court of Human Rights and has been more of a hindrance than a help to anti-terror policing.”