Control orders could be replaced with a three-tier system of restrictions for terror suspects to avoid a Cabinet split on the issue, the independent reviewer of terrorism legislation said today.
Lord Carlile said the compromise move could meet Deputy Prime Minister Nick Clegg's civil liberties concerns over the use of controversial control orders "without disproportionately risking innocent lives".
A Home Office review of counter-terror measures is reported to have backed the retention of the orders, which impose severe restrictions on suspects who have not been charged, after receiving representations from MI5.
Writing in the Daily Telegraph today, Lord Carlile said foreign travel restrictions could be placed upon those suspected of wanting to travel abroad to train as terrorists.
A second tier of general travel restrictions could be imposed on individuals with "a more developed intent to participate in terrorist activity".
And, for the most serious cases, activity restriction orders could be enforced "where a judge was satisfied on the much raised standard of the balance of probabilities that the individual is a terrorist".
"The system would have an increasing scale of restrictions, including curfews (but not compulsory relocation) for the highest tier," Lord Carlile said.
His comments come after former Conservative leadership contender David Davis warned earlier this month that up to 50 coalition MPs could vote against the Government if it seeks to keep control orders.
Mr Davis - Tory shadow home secretary until he resigned his seat over civil liberties issues - said he would vote against any attempt by Home Secretary Theresa May to keep the orders, which have been compared to house arrest.
His comments were made amid claims that Prime Minister David Cameron feared a "car crash" on the issue which could split the Cabinet.
Liberal Democrat peer and former director of public prosecutions Lord Macdonald, who is overseeing the conduct of the counter-terror review, is reported to have written to Mrs May, warning that he would publicly denounce any decision to retain control orders.
Shami Chakrabarti, director of human rights group Liberty, said: "Lord Carlisle has a predictably uncompromising idea of compromise.
"You can slice, dice and re-name control orders but that will not alleviate the continuing scandal of indefinite punishment without charge or trial.
"Everyone involved in propping up this policy over the last five years should be thoroughly ashamed of a system that is as unsafe as it is un-British and unfair."
The Home Office said no decisions have yet been made.