Jack Straw said some young women ended up in crisis because "well-meaning but not very professional" social workers misjudged their ability to look after their children.
There are currently some 3,500 babies under the age of two in care. Mr Straw suggested social workers are being unrealistic about their chances of being successfully returned to their parents. He said adoption should be presented as a "positive, responsible choice" to mothers who could not care for their youngsters.
Speaking at a conference on families organised by the Family Policy Studies Centre, Mr Straw said it was a myth that the only children in care were older youngsters who were difficult to place.
"It is still a sad fact that many suitable couples have been on waiting lists far too long, while children have remained in care," the Home Secretary said.
He added that more babies would be put up for adoption if the system was more "user-friendly" and that the Government needed to improve the opportunities for childless couples to adopt. "The current situation is not satisfactory," he said.
But Felicity Collier, director of the British Agencies for Adoption and Fostering, said Mr Straw's comments were "provocative stuff" akin to the remarks of the Tory MP John Redwood, who once said teenage single mothers should put their babies up for adoption.
She admitted some authorities were quicker than others at placing children and that it took an average of 13 months for a baby given up at birth to be adopted. "We do want to do everything we can to reduce the delay."
But the lesson of the 1950s, 1960s and 1970s was that adoption could cause considerable distress to mothers if proper counselling did not take place.
"It seemed to society that it was best for the babies [of single mothers] to be brought up in a nuclear family but there has been a huge legacy of guilt and loss," Mrs Collier said. Up to 30 per cent of the mothers who relinquished their babies had suffered mental health problems.
"We believe that, although adoption is a happy outcome for most children, where it is possible for the children to be brought up by their birth parent, that is the best option."
The best way to improve the situation would be to change the law, but the Government had failed to respond to pleas, Mrs Collier said.
Adoption agencies want the rules changed so the child's best interest is paramount. In cases where adoption is clearly for the best, that would give greater authority to courts to overrule a parent who objected.
Terry Dadswell, of the British Association of Social Workers, said there was a balance to be achieved. "It is a sensitive area and, by and large, social workers who deal with fostering and adoption are specialists in it," he said.
In 1996, the most recent figure, nearly 6,000 children were adopted, including 253 babies under one, whereas in the peak year of 1968 there were nearly 25,000 adoptions.Reuse content