The tagging plan will be accompanied by a new "three strikes and you are out" law to give a minimum three-year jail sentence to burglars convicted for the third time.
Mr Straw confirmed yesterday that the Home Office was developing sophisticated tags that would alert local police if sex offenders went near schools.
The Conservatives have complained about the effectiveness of the tagging system and claim that the early release of non-violent offenders has been an abuse of public trust. But the Home Secretary will state this week that an extension of the scheme is the best way of "managing the risk" once a sex offender is released into the community.
Under the Crime and Public Protection Bill, murderers could also face being tagged for life. Most convicted murderers serve 14 years of a sentence before they are released on licence and the tags would offer the public "reassurance", Mr Straw believes.
More than 6,800 violent criminals and sex offenders are released on licence every year before they have completed their sentence and risk being sent back to jail if they fail to live at an approved address. However, recent research has found that probation officers fail to make home visits to one-quarter of the sex offenders under their supervision.
Sex offenders are more likely to be released from jail early by the Parole Board if they agree to wear a tag throughout a supervision period of 10 years. Child murderers and those convicted of other serious offences against children, however, would be forced wear one for life.
Mr Straw said yesterday that electronic tagging was an important alternative to traditional probation or community service, which have low enforcement levels. "You've got sex offender orders at the moment which can ban people from particular areas or that could be part of the bail condition. But technology here provides us with great opportunities," he told the BBC's Breakfast with Frost programme.
"As the technology rolls out, and it's not that much different from mobile- phone technology, as this technology becomes much more sophisticated then the opportunities for using tagging to curfew people out of an area rather than within an area become very substantial.
"It's one of a number of important things we're doing to improve the way that we deal with offenders who aren't in prison or who come out of prison."
Other measures in the package include new police league tables, details of 5,000 extra police officers and moves to protect 200 burglary "hot spots".Reuse content