Chancellor Gordon Brown has promised to bring in new laws to cut the burden of red tape on business.
Gordon Brown says the new approach will focus on "bad traders"
Writing in the Financial Times, he has committed the government to a new bill which will replace unnecessary rules with a "risk-based" approach.
Mr Brown said business leaders would be consulted on which regulations should be stripped out or simplified.
Plans for a reform bill to cut the number of official regulators were set out in last week's Queen's Speech.
Mr Brown said inspectors would in future target "bad traders", rather than continuing a system where "everyone was inspected continuously".
"Under a risk-based approach, there is no unjustifiable inspection, form-filling or requirement for information," he told the FT.
"Not just a light touch but a limited touch. Instead of routine regulation trying to cover all, the risk-based approach targets the necessary few."
Mr Brown has already promised to cut the number of inspections carried out each year by one million.
The government will introduce legislation early next year to reduce the number of regulatory bodies from 29 to seven, with a bill to remove unnecessary and outmoded laws coming later.
The chancellor said the new approach was a significant step away from the old belief that businesses could never be trusted to follow the rules.
"The better view is that business wants to act responsibly. Reputation with customers and investors is more important to behaviour than regulation," he said.
He urged transparency and a light touch as "more effective than a heavy hand".
BBC business correspondent Nils Blythe says Mr Brown will be hoping to use Britain's EU presidency to promote this strategy in Europe - the source of many new regulations.
Many businesses will wait to see whether red tape really is cut before they pass judgement on the chancellor's plan, he added.