It said rules allowing police to retain indefinitely the genetic profiles of everyone arrested for a recordable offence were indiscriminate.
They did not differentiate between criminals and people who had never been convicted, or the severity of offences, it ruled.
The policy has led to protests from individuals, civil liberty groups and opposition parties that the distinction between the guilty and innocent is being "blurred".
Supporters say it has played a key role in solving some "cold case" crimes where serious offenders have been caught - or innocent people cleared - many years after the original investigation.
The current database has provided 400,000 crime scene matches over a decade.
Home Office minister Vernon Coaker told BBC Radio 4's Today programme that research showed half of those who reoffend after arrest do so within six years, and two-thirds within 12.
"What we are trying to do is respond in a way that's proportionate, that conforms to the [court] judgement in a way that we do as much as we can to protect the public," he said.
Shami Chakrabarti, director of civil rights group Liberty, said: "This isn't necessarily a complete two fingers to the court of human rights but it comes pretty close.
"We don't base the justice system on criminologists' projections.
"The logic of the government's position would be to take every man, woman and child in the country and put them on the database, just in case."
Launching its consultation on how to comply with the court's judgement, the Home Office said its proposals include:
• Destroying all original DNA samples, like mouth swabs, as soon as they are converted into a digital database profile
• Automatically deleting after 12 years the profiles of those arrested but not convicted of a serious violent or sexual crime
• Automatically deleting after six years the profiles of anyone arrested but not convicted of other offences
• Retaining indefinitely the DNA profiles and fingerprints of anyone convicted of a recordable offence
• Remove the profiles of young people arrested but not convicted, or convicted of less serious offences, when they turn 18
While the DNA profiles of all children under 10 have already been deleted, the database is to be expanded to include 30,000 serious offenders who were convicted before the database was established.
Officials estimate that up to 850,000 of the 4.5m profiles on the database could be affected by the changes and it will take two years to sort through the cases.
In practice many of these profiles may be retained under the 12 and six-year rules.
In Scotland, records can only be held beyond three years if police get court permission - a system deemed "fair and proportionate" by the European court.
Prof Jim Fraser, of Strathclyde University, who reported on the issue for the Scottish government, said UK ministers ought to justify their time limits.
"The central question is: 'Is 12 years proportionate?' and it's quite a difficult question to answer," he said.
"Most offences are committed by a relatively small number of people and they tend to reoffend and reoffend quite soon," he said, adding that he had concluded that most would do this within three years.
DNA sample on arrest
If cleared, profile deleted
If cleared of serious sexual or violent offence, profile kept for maximum of five years
System praised by European Court of Human Rights
Crime victims campaigner Jill Saward said wiping the records would contribute to an ongoing "erosion of justice" in the UK.
"Anything that we do that takes away the possibilities of finding out who the guilty are is very detrimental," she said.
Home Secretary Jacqui Smith said the proposals would ensure the right people were on the database, as well as establishing when they should come off it.
But shadow home secretary Chris Grayling said a Conservative government would adopt the Scottish model.
He said: "People in Britain should be innocent until proven guilty.
"Ministers are just trying to get away with as little as they possibly can instead of taking real action to remove innocent people from the DNA database. It's just not good enough."
Liberal Democrat home affairs spokesman Chris Huhne said: "Once again, the Home Office is fighting an undignified rearguard action designed to give as little as possible in response to the ruling of the European Court of Human Rights."
Dr Helen Wallace from the charity Genewatch told the BBC: "If you are a suspect for a crime you should be able to have your DNA taken during that investigation.
"But why does it need to be held on file? That shouldn't be the case unless you've been convicted."
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