John Reid has said control orders are "far from the best option" to tackle terrorism, saying they could not stop determined suspects absconding.
Ibrahim Adam, Lamine Adam and Cerie Bullivant
The home secretary was facing MPs in Parliament after three men suspected of wanting to kill UK troops disappeared.
Mr Reid blamed political opponents and judges for stopping the use of tougher measures against terror suspects, and promised new measures within weeks.
The Tories accused Mr Reid of failing in his duty to protect the public.
But Mr Reid said that when he outlines new anti-terror measures he hoped there would be "less party politics" and more concern "for national security".
He will outline those measures - which could form the basis of a new counter-terrorism bill - before he steps down at the end of June.
He said he was not complacent about the risk posed by the three men - although they were not judged to be a threat to people in the UK.
He added that he had consistently said control orders were not the best option, "or even the second best", for tackling terrorism suspects.
But he added: "Under our existing law, control orders are as far as we can go.
"Unfortunately under these limitations, within the existing legal framework, it is very difficult to prevent determined individuals from absconding."
He added that, if the government failed to overturn previous court judgements on control orders, they would "consider other options - including derogation".
This could mean effectively opting out of some aspects of European human rights laws, which have limited the scope of control orders.
Introduced March 2005, after preferred policy of detention without charge or trial is ruled illegal
Used when people are considered a threat to national security, but insufficient evidence for trial
Range from electronic tagging and virtual house arrest to banning use of internet or phones
Home Secretary can make six-month or 12-month orders on foreign nationals or British citizens
Home Secretary usually applies to the courts for a control order
One can be imposed in an emergency, but it must be reviewed by a court within seven days
But he added he would prefer to develop "an understanding" across Europe to "build on" the European Convention of Human Rights to reflect the current problems.
Tony Blair also said the preferred option had always been to detain terror suspects.
For the Conservatives Dominic Grieve said Mr Reid was trying to blame others, but the failings were of the government's own making, as it had not taken enough action to strengthen border and embarkation controls.
He also asked why the three suspects had not been electronically tagged, which would not have contravened human rights laws.
"The key failure is that the government has done nothing to bring forward measures which might facilitate bringing such individuals to justice," he said.
Both the Lib Dems and the Tories have urged greater use of "intercept evidence", like phone taps, in court - to bring more suspects to trial, but that has been resisted apparently because security services do not wish to disclose tactics or sources.
The Liberal Democrats say control orders are "discredited".
Party president Simon Hughes added: "We don't think you should take us out of the European Convention on Human Rights.
"We have tried that before, imprisoned people in Belmarsh without trial - that was found to be illegal. Liberal Democrats always said that was the wrong way to go.
He added: "But we need to find more effective remedies than the control order system."
The counter-terrorism bill could also include a look at whether suspects can continue to be questioned after they have been charged, and to revisit attempts to extend the 28-day limit on holding people without charge.
An attempt to increase it to 90 days in 2005 ended with Tony Blair's first Commons defeat as prime minister.
Mr Reid said the government would bring forward new measures
Six people have absconded since control orders were introduced in March 2005.
This time, in an unusual step, police have released the names and pictures of the latest three.
They say Lamine Adam, 26, his brother Ibrahim, 20, and Cerie Bullivant, 24, have been missing for more than 24 hours and may be together.
They had been required to surrender travel documents and report daily to a police station - two also had to call a monitoring company each night.
Not 'direct threat'
It has emerged that one of them, Cerie Bullivant, appeared at the Old Bailey in April, charged with breaching 13 conditions of his control order.
The government says the men do not represent a direct threat in the UK, but they were subject to orders because they were suspected of wanting to travel abroad "for terrorism-related purposes".
But shadow home secretary David Davis said Mr Reid had consistently failed to protect the public.
He said the Conservatives would support the government's measures if they came up with "sensible" proposals.
Control orders were originally introduced in as a way of supervising people suspected of terrorism who could not be deported, but against whom there was not sufficient evidence to bring a prosecution.
The government's preferred option was to keep them detained in prison without trial, but that had to be abandoned after court rulings.
Subsequent court rulings also curbed the use of restrictions placed on suspects under control orders - which could range up to effective house arrest.
Shami Chakrabarti, the director of the human rights organisation Liberty, said the control orders were "a disgrace and an embarrassment to our security policy".