The "shoot-to-kill" policy for suicide bomb suspects is not being extended to non-terrorist incidents, Metropolitan Police chief Sir Ian Blair has said.
Sir Ian Blair was criticised after Mr Menezes was mistakenly shot
But Britain's top officer said the police already had the power to shoot hostage-takers and kidnappers, for example, who were threatening others.
Sir Ian also said the statistics showed his officers were not "trigger happy".
Firearms officers used the strategy when they killed Brazilian Jean Charles de Menezes in error on the Tube.
They had mistaken him for a suspected suicide bomber at Stockwell station.
Answering questions from the Metropolitan Police Authority (MPA), Sir Ian said Operation Kratos - by which the policy of shooting suspected suicide bombers in the head is known - was not being extended.
But he said: "If somebody was holding a 10-year-old child with a knife to the child's neck and is about to start cutting the child's head off, the only shot available might be to the head, in which case that's what would be done."
This did not constitute a widening of the powers because the criminal law had always allowed reasonable force to be used and that had not changed.
He admitted that there needed to be a public debate on the lethal use of force and a leaflet to explain the policy has been sent out today to all areas of the Metropolitan Police.
And defending his force's record, Sir Ian said the statistics for the nine years since the firearms unit - known as SO19 - was set up, showed it had a good record.
He said SO19 officers fired their guns at one in every 2,000 incidents that they attended and only killed someone on one in every 10,000 occasions.
But Mr Menezes' cousin Alex Pereira said Sir Ian had failed to answer "a single question" about Operation Kratos - "who devised it, who authorised it and who should be held to be accountable for its failures".
"Sir Ian Blair should stop trying to justify this policy - and instead provide answers to all the questions we have about his role in the death of my cousin."
The Independent Police Complaints Commission is still investigating what went wrong when Mr Menezes was shot dead.
The shooting came the day after the failed London bomb attacks of 21 July.
The Brazilian electrician was shot seven times in the head by anti-terror officers while passengers looked on.
Mr Pereira said: "They shot my cousin like a dog - seven bullets to the head from less than 30 centimetres - whilst he was being restrained.
"That is the reality of this policy.
"There has been no public discussion or debate about a policy where it is 'shoot first and ask questions later'.
"This sort of policy does nothing to make the people of London feel safer or have more confidence in their police."
Assistant Commissioner Steve House told the authority officers had no choice but to employ a policy such as Operation Kratos in terror-related situations.
He said: "I think we would be held in some contempt by the people of London if we were to turn around and say, I'm sorry we have no credible tactic to deal with this very real threat."
But Mr House insisted it was not a "shoot-to-kill" policy.
"In a terrorist scenario the action must be decisive and end any threat to the public," he said.
"If there was a way we could incapacitate that person without the use of lethal force we would use it.
"Why would we not want to take a terrorist alive so that they could be questioned and give us intelligence? We would far rather have somebody alive to tell us that."
But senior lawyer and member of the Criminal Bar Association John Cooper said the rules were being made in a climate of panic and fear rather than through calm development.
He added: "What I'm concerned about is that once guns are available easier by the police in these circumstances, they'll be available far easier in all circumstances, not just terrorism.
"The boundary is being shifted and once it's been shifted, it will be very difficult to put it back again".
Green member of the MPA, Jenny Jones welcomed news that the policy was to be subject to a full public consultation.
She said it was about time the voice of some of Britain's human rights groups was heard on the issue.