Some of the 43 police forces in England and Wales may have to merge, Home Secretary Charles Clarke has told chief police officers.
Mr Clarke says policing is often good but sometimes "awful"
He said: "I do not have a blueprint for change, but I don't think the number 43 is the best way we should organise ourselves throughout the country."
But aides say he is not talking about forming one national police force.
The "alphabet soup" of agencies which inspect and advise police could also be shaken up, said Mr Clarke.
Police forces have traditionally strongly guarded their independence but are increasingly being encouraged to work together on investigating serious crimes.
Mr Clarke told the Association of Chief Police Officers' conference the system of 43 forces should not be continued simply because that was how it had always been done.
"An initial assessment shows clearly that in our present structure some key respects are not fit for purpose," he said.
His comments could pave the way for attempts to amalgamate smaller forces with larger neighbours, but no forces have been named.
The speech comes after Mr Clarke told rank-and-file officers they faced too much red tape - and pledged to ease the burden.
He told the Police Federation on Monday he wants to work with them to improve a service which was good in many areas but can be "awful".