The Human Fertilisation and Embryology Authority is to send a leaflet to family doctors and fertility units aimed at informing and encouraging men and women to consider sperm and egg donation.
The authority wants to move away from the image of medical students donating sperm to pay for books, beer or rent.
Data collected by the authority shows, for the first time, about 20,000 attempts at donor insemination are taking place each year, resulting in about 2,000 babies.
The confidentiality laws, introduced in the Human Fertilisation and Embryology Act 1990, which regulates fertility clinics and embryo research, have scared off some donors - needlessly says the authority. Disclosure of the confidential information could attract a two-year prison sentence.
The effect has been less choice of 'father' for couples seeking donated sperm and even greater difficulties for infertile couples from ethnic minorities who can have particular racial, or religious requirements.
The authority - set up under the Act - has proposed that there should be a limit of pounds 15 'expenses' for each sperm donation. The regulations stipulate that one donor should not father more than 10 children. In addition, donors must provide blood for testing at the time of the donation and six months afterwards to be certain that the donation is free of HIV infection.
The authority has a legal obligation to tell 'children' - who ask - if they have been born as a result of donated eggs or sperm, in order to check if couples contemplating marriage are blood related.
The package of regulations means a 'more committed and altruistic' approach from donors, says Hugh Whittall, spokesman for the authority. 'What our leaflet will seek to do is to make access to the right kind of information easier for men who may be interested.' he said.
'There has always been a difficulty in getting the right kind of donor and the new law has added to existing problems. Masturbating into a pot has always been a slightly embarrassing affair. People in the clinic know what the man has just done,' he said.
The authority is now looking for older men in established relationships who discuss the idea with wives or partners first.
Peter Bromwich, director of Midland Fertility Services, near Sutton Coldfield, said they had lost all but one of their 20 donors when the names had to be recorded. 'We tried to reassure them, but they still took the view that the law could be changed in the future. One man carried on for a little while, but then his wife became concerned about future confidentiality.
'There are special problems for our ethnic minority patients. We have promised a Hindu couple we will not use Muslim semen, and there is a Chinese lady who is registered at many British clinics and who has even been to Singapore in search of Chinese semen,' he said.
Peter Brinsden, director of Bourn Hall Clinic, near Cambridge, said the loss of supply had not been as great as had been feared. 'The availability of a broad range of donors has reduced, but I believe the effect has been to improve the type of donor coming forward.
'We would prefer the donor to be a man in his early thirties with proven fertility in a happy relationship. I am not so happy about the medical student producing donations for pounds 10 or pounds 12 a time. We should be encouraging donors with the right motive - to help infertile couples,' he said.