Tony Blair's anti-terror policy is being "submerged" by party political interests, a report says.
Ministers must stop mentioning a 'war on terror', a report says
The Joseph Rowntree Reform Trust said ministers could be accused of "exploiting the politics of fear".
And by trying to win "the white working class vote" they risked alienating Muslims who could help defeat terror.
The Home Office, which makes "no apology" for bringing in tough laws, is preparing fresh anti-terror measures to be unveiled in the Queen's Speech.
These might include a new effort to extend to 90 days the time that terror suspects can be held by police before being charged.
The director of public prosecutions Ken Macdonald told the BBC on Monday he backed a fresh review if there was evidence that a longer time limit would prove useful.
The trust's report says Mr Blair's "close and publicly unquestioning stance" alongside the United States was damaging Britain's influence on global politics.
It said: "The government's counter-terrorism campaign is often driven by party-political and electoral motives that are 'submerging' its own 'sensible' counter-terrorism strategy.
"The actions of ministers, particularly Home Secretary John Reid, could have a 'boomerang effect' by alienating the Muslim communities whose trust and co-operation are vital."
Report co-author Stuart Weir said: "The government has a sensible strategy for dealing with terrorism but John Reid and Tony Blair have been playing to the tabloid gallery, raising suspicions that they are trying to win over the white working-class vote."
The trust urged the government to find a way to prosecute terror suspects under criminal law rather than by seeking to take them out of circulation with control orders or "preventative detention".
"We strongly urge the government to abandon talk of a 'war on terror'," it said.
"This terminology is misleading and disproportionate and leaves the prime minister open to the charge that he is exploiting the politics of fear.
"It allows terrorists to assume the dignity of being 'soldiers' or 'combatants' instead of the mere criminals that they are."
Ministerial attacks on the judiciary for confounding their anti-terror legislation were "unfounded and constitutionally illiterate", it added.
Plans to consolidate all Britain's anti-terror laws in a single Terrorism Bill have been promised for 2007 and should feature in this week's Queen's Speech, it said.
A Home Office spokesman said: "The threat we face is serious. We make no apology for bringing in tough new laws and putting the fight against terrorism at the heart of the work of the Home Office.
"Over recent months the home secretary has been engaged in a series of events both public and private within Muslim communities in the UK.
"This is an engagement he intends to continue precisely because he recognises that it is only by working with our communities that we can defeat terrorism."
On Sunday, Chancellor Gordon Brown said anti-terror policy would be his "first priority" if he became prime minister.
Conservative leader David Cameron said he would appoint a Cabinet minister responsible solely for combating terrorism.
And Deputy Prime Minister John Prescott told the BBC he wanted the current 28-day limit for holding terror suspects without charge to be looked at again.
Government plans to set the limit at 90 days were defeated last year, with MPs agreeing to a compromise which saw the then 14 day limited extended to 28 days.