The independent reviewer of control orders says the orders should be used as a "last resort".
Three people under control orders have absconded
Lord Carlile of Berriew QC also said the control order system is a "justifiable and proportional safety valve" for the protection of society.
Three people under such orders have absconded and Lord Carlile said there were problems with having individuals under constant surveillance.
But he said this should not undermine the benefits of control orders.
He also doubts that "any well organised terrorism cell" would rely on anyone being sought by police, and suggests absconders pose little risk as long as they are "sought diligently".
In the case of one of the absconders, who disappeared after entering a mosque, the Liberal Democrat peer does not criticise police for not entering the mosque in an effort to recapture him, saying it would have been "inappropriate" to do so.
However, he does say that it should be made clear that police will pursue those in breach of orders "wherever" they are situated.
He said: "Anyone knowingly giving shelter from legal obligations has a clear civic duty to facilitate compliance with the law.
"If they do not do so, they will have little cause for complaint if police enter their premises.
"In so entering the police must show full respect for the nature of the premises concerned, and do the minimum reasonably necessary to fulfil their duty."
In his report, Lord Carlile, who acts as the government's independent reviewer of terror laws, also said: "There has to be an end of the order at some point, in every case.
"Some of the controlees have already been the subject of their orders for a considerable time.
"Their orders cannot be continued indefinitely - that was never intended and would not be permitted by the courts.
"As a matter of urgency, a strategy is needed for the ending of the orders in relation to each controlee."
Failure to create a strategy would be "short-sighted", he said.
Home Secretary John Reid said: "Control orders were never our preferred option, but they remain an essential measure to deal with suspected terrorists who cannot be prosecuted or deported."
A Home Office spokesman said Lord Carlile's recommendations would be considered.
He said: "We already consider exit strategies for individuals under control orders.
"Individual cases are kept under regular quarterly review, through the Control Order Review Group, with a view to deciding whether a control order remains necessary, whether there are other options to address the risks, and to see whether the control order obligations remain necessary and proportionate.
"Thus a control order will be revoked if no longer justified. Similarly, prosecution remains another potential exit strategy."
Shadow Home Secretary David Davis said: "We have said from the beginning that it is better to convict and lock up a terror suspect rather than trying to hold him under less than secure conditions.
"This demonstrates what we have feared all along - that control orders are being used instead of prosecutions rather than in situations where prosecutions are not possible."
A judge at Manchester Crown Court quashed a control order on a terrorist suspect last week on the grounds that he had been deprived of his liberty.
There are a total of 18 control orders currently in force. Two suspects subject to the control orders - a British citizen and an Iraqi - are currently missing.
A third suspect - a male British national - absconded before a new control order could be served in January.
The orders were brought in for cases where there was not enough evidence to bring suspects to trial.