Anti-social behaviour orders (Asbos) have become a "badge of honour" among young people, says an official study.
A generation could be demonised by exaggeration, warned ministers
Many tackling youth offending doubted their effectiveness and some teenagers saw them as glamorous, said research for the Youth Justice Board.
The year-long study in England and Wales said half the Asbos were broken.
But Home Office minister Tony McNulty said Asbos were used sparingly and only as a last resort to change behaviour that was badly disrupting communities.
Mr McNulty said only 7,000 Asbos had been given out by the end of last year.
"Our communities have the right not to be constantly abused by anti-social behaviour," he said.
"There is much we are doing with young children to try and prevent that but let's not demonise a whole generation. We are talking very, very small numbers."
The research conducted by the Policy Research Bureau and crime reduction charity Nacro looked at Asbos given to under-18s between January 2004 and January 2005 in 10 areas of England and Wales.
Of 137 young people, 67 had breached their order at least once, 42 more than once and six on six occasions or more.
"High levels of breach had led some sentencers to question how much impact Asbos were having on the behaviour of individual young people," the study said.
"A considerable number of respondents alluded to the potential for the order to become glamorous," it added.
Asbos were introduced by the government in 1999 to impose conditions on a person's behaviour and breaking one can lead to jail.
Youth Justice Board chairman Professor Rod Morgan urged the police, councils and courts to only issue an Asbo to a young person if working with the family had not worked.
One district judge told researchers young people who breached orders were not properly punished.
And parents and carers of the young people given orders said an Asbo was now viewed as a "diploma" that boosted a child's street credibility.
"Some of the friends are left out now because they are not on an Asbo," said the mother of three young men who were all on Asbos.
Conservative leader David Cameron said family failure was to blame.
"Let's do more to support families, let's do more to back marriage, let's do more on drug abuse and alcohol abuse and deal with these long-term causes of crime, otherwise we're just going to see the growth of the Asbo society."
Liberal Democrat home affairs spokesman Nick Clegg said the prime minister was "demonising" young people through the Asbo system, and what was needed was engagement.
The study indicated 22% of young people given Asbos are black or Asian - two and a half times the proportion of people from ethnic minorities in England and Wales.
The report is published on the same day that a separate study by the Institute for Public Policy Research suggests Britain's youth are among the most badly behaved in Europe.
Researchers believe this can be explained by a collapse in family and community life in the UK.