The UK might have to modify its freedoms in the short term in order to prevent their "misuse and abuse" by terrorists, John Reid has said.
John Reid is calling for more public vigilance
He conceded that was never an easy request, but it was up to everyone to ask: "What price our security, at what cost can we preserve our freedoms?"
The UK faced its "most sustained period of severe threat since the end of World War II", the home secretary warned.
He urged people from all communities to help by being vigilant.
He argued, in a speech to think tank Demos, that while the police and security services were doing all they could to protect the public, they cannot be sure of stopping terrorist attacks.
He also described migration as the "greatest challenge" to the EU, claiming that there was a need to get away from the notion that people who discuss this were somehow racist, because "they are not".
His words come a week after the Court of Appeal said control orders used to restrain the movements of six terror suspects broke human rights laws.
As he promised to appeal against the ruling, Mr Reid said another attack on the UK was "highly likely".
In his address, Mr Reid used stark terms to describe how today's terrorists were "unconstrained" in their intentions, by international conventions, standards or morality.
"None of us should be anything other than vigilant and that vigilance is the price of securing our freedom," he said.
"There is no room for complacency. We are probably in the most sustained period of severe threat since the end of the Second World War.
"While I am confident that the security services and police will deliver 100% effort and 100% dedication, they cannot guarantee 100% success.
"Our security services and the apparatus of the state, while they are an absolutely essential pre-requisite for defeating terrorism, cannot be sufficient on their own.
"Our common security in this country can only be assured by a common effort from all sections of society."
Security rethink needed
Mr Reid said the "challenge to all of us" means "we may have to modify some of our freedoms in the short-term in order to prevent their misuse and abuse by those who oppose our fundamental values and would destroy our freedoms and values in the long-term".
"It is up to each and all of us to ask the questions: what price our security? What price our freedoms? At what cost can we preserve our freedoms?
"What values are at stake and what is the cost of making the wrong choices in the short term?"
Mr Reid said politicians, the judiciary and the public sector needed to "understand the depth and magnitude" of the terrorist threat facing the UK.
He said he was frustrated by the number of people who should be better informed, but "who just don't get it".
He called for a dramatic rethink of the country's security policy to fit this century, rather than base it on a framework more suited to the last century.
Border police call
Shadow home secretary David Davis said Mr Reid was right not to under estimate "the grave threat" the UK faces from terrorism, which was why the Tories had helped implement effective measures against it.
He said the government should now answer Tory calls for a UK border police force and appoint a dedicated minister for counter-terrorism.
Liberal Democrat home affairs spokesman Mark Hunter said Mr Reid needed to make sure the government's counter-terrorism strategy encouraged co-operation from all sections of the community, rather than undermined it.
The speech follows the latest court battle over the terror laws. The Court of Appeal judges did not quash the system of control orders, which are used to restrain terror suspects where there is not enough evidence to prosecute them.
But they said the orders applied to six suspects were so stringent they broke European laws outlawing indefinite detention without trial.
Mr Reid has now issued new orders against the men which shorten their curfews from 18 hours to 14 hours a day and relax restrictions on who they are allowed to meet.
But he said the orders were now not as restrictive as the security services believed necessary.