Mark Oaten, the party's home affairs spokesman, said it was unacceptable to extend the current 14-day maximum detention period.
In his strongest words yet on the anti-terror proposals, he said he oppose a move by the Home Secretary, Charles Clarke, to give anti-terrorist police powers to hold suspects for three months without charge.
Mr Oaten won applause at the party's annual conference in Blackpool yesterday as he declared that the party would also oppose plans to create a new offence of indirect incitement by "glorifying terrorist" offences.
Mr Oaten said: "I'm not in the business of getting in a bidding war about whether people can be held for one month or three months. I don't believe we should go beyond 14 days. The case is just not made."
He told delegates: "We can't support a wide and vague offence that allows glorification of terror to become a crime. What on earth does that mean? One person's terrorist is another person's freedom fighter.
"This is a dangerous proposal, hard to define in theory, unworkable in practice and putting freedom of speech at risk."
Mr Oaten said the policies amounted to "internment" and meant giving up hard fought civil liberties.
His intervention puts the party on a direct collision course with Mr Clarke over anti-terror laws, and raises the prospect of a constitutional clash in the House of Lords, where the combined opposition forces can vote down key aspects of the plans. Some Tories have already expressed reservations over extending power powers to hold suspects.
Police have argued that they need new power to hold suspects to deal with the mass of new evidence in terror cases.
Mr Clarke said: "The Lib Dems speak for themselves, but I think we should take the police's views on the measures they need to fight terrorism seriously."
Lord Morris, the former Labour attorney general, has warned that the proposals will struggle to win backing in the Lords, where senior lawyers have a history of opposing legislation that erodes civil liberties.
Mr Oaten accused the Government of doing too little to help the victims of the bombings in London on 7 July, saying that some faced a 15-month wait for compensation. .
"Many face expensive bills as they can no longer work," Mr Oaten said. "Many require specialist treatment for the loss of limbs and need money to adapt their homes to cope with their new disability."
Mr Oaten also called for an expansion of prison education and said Victorian jails should be demolished and replaced with modern institutions built to give inmates the skills they need to avoid returning to crime.