Home Secretary David Blunkett said police would be able to instruct suspects to appear at a station at a later date, rather than taking them there straight away.
This will give them the chance to remain on the beat and avoid ever-growing backlogs in custody suites.
And, in a speech to the Police Superintendents' Association (PSA) Mr Blunkett also outlined plans to give officers hand-held computers and pagers, so they would only be in court when needed.
He further pledged to halve the number of forms they would be asked to fill out.
The crusade to cut paperwork came as the government announced there were a record 130,000 officers on the beat.
Mr Blunkett explained that the new recruits would "only be effective if we breakdown the unnecessary bureaucracy they face".
Under the reforms, police will also be encouraged to eat their meals in fast food outlets, supermarkets and restaurants - to increase their visibility.
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On the drive to cut paperwork, the home secretary said: "A staggering 250 forms are in regular use by front-line staff.
Form-filling
"These forms can be repetitive, too long and even redundant."
The 'street bail' plan will see officers handing out a form which will include the person's name, address and ethnic origin, designed not only to save time but also to crack down on officers who stop too many blacks and Asians.
Street bail will only apply to people who have committed relatively minor offences such as shoplifting.
All "stops" as well as "stops and searches" will now be recorded, as suggested in the Lawrence Inquiry Report.
Typical day
The home secretary's announcement is in response to complaints from the PSA and a survey last year, which showed police officers spent around 43% of their time snarled up in red tape and form-filling.
More than 40,000 officer hours are wasted in one year alone filling out a complex stolen vehicle form.
Diaries were kept by 400 officers to help assess the challenges facing police during a typical day.
Officers have complained that just one arrest would tie them up for a whole day.
Shadow home secretary Oliver Letwin welcomed Mr Blunkett's move to reduce police red tape.
But he added: "We shall watch closely to see if he actually carries out this latest initiative, although his track record in putting his announcements into practice is not impressive."
Mr Letwin went on to praise the increase in police numbers as "good" but added it was "not good enough".
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250 forms in regular use
43% of officers' time spent in stations
17% of their time is spent on patrol
Related to this story:
Red tape filling officers' days
(17 Sep 02 | UK)
Case study: Police tied up with red tape
(15 May 02 | Politics)
Bobbies on the byte
(12 Mar 02 | Science/Nature)
Police red tape targeted
(01 Nov 01 | Politics)
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