Police will get new powers under the bill
Peers have raised fears that the legislation, which includes plans to detain terrorist suspects without trial, ranges too widely and is being rushed through Parliament too fast.
A Church of England bishop has also warned the proposed increase in police powers puts at risk recent progress towards better race relations.
Ministers continue to argue the Anti-Terrorism, Crime and Security Bill is a "proportionate" response to the terrorist threat.
The bill, which would also create a new offence of inciting religious hatred, easily cleared its Commons stage after just three days of debate, despite revolt by 21 Labour MPs.
But the government faces an uncomfortable eight scheduled days of scrutiny in the Lords, which could delay the plans.
Peers began that scrutiny by voicing their determination to see major changes made before the measures become law.
'Premature plans'
The government has been accused of rushing through ill-conceived and "illiberal" legislation as a knee-jerk response to the terror attacks of 11 September.
Such criticism continued as Conservative home affairs spokesman Lord Dixon-Smith said the bill was in need of "intensive care".
The Tory peer likened the plans to a "premature baby dragged kicking and screaming into the world far too soon".
He was worried the scope of the bill went too far, creating powers that were right for tackling terrorism but wrong for fighting crime in general.
Liberal Democrat spokesman Lord McNally urged his fellow peers to use their "collective wisdom and experience".
The legislation could be improved by using the knowledge of some of the most distinguished lawyers in the land, he continued.
Lord McNally agreed it was right to close legal loopholes that terrorists could exploit.
But ministers the government had to "make its case" with the right approach to civil liberties and human rights.
Race relations fears
Away from the political parties, the Rt Rev Christopher Mayfield, Bishop of Manchester, gave a stark warning about the dangers the measures held.
Particularly criticising extension of police powers, he said: "Much of the good work that has been done in improving community relations in the past few years could be undone by heavy handed introduction of the bill."
Fears about the plans were also voiced by two former home secretaries.
Lord Waddington argued the religious hatred offence could be used against intemperate language and "more against Muslims than those who vilify them".
The Conservative peer also attacked the plans for detention without trial, saying it risked the "far more authoritarian step of suspending habeas corpus".
There were cautionary words too from Liberal Democrat Lord Jenkins of Hillhead, who as a Labour minister introduced the Prevention of Terrorism Act in 1974 after the Birmingham pub bombing.
While it was an "entirely human and particularly ministerial reaction" to want react, Lord Jenkins said something was not necessarily better than nothing.
'Moderate plans'
Home Office Minister Jeff Rooker defended the anti-terror plans as a "moderate and precautionary response", which generally commanded whole-hearted public support.
He emphasised how the events of 11 September showed how the nature of security threats had changed.
"The old way of working where you knew where the enemy was doesn't quite work in today's international terrorism and we have to modify our rules to meet that," said Lord Rooker.
The minister continued: "We can't forecast when the next act of mass terrorism may be. Nobody is claiming that this bill will solve the problems and stop it all.
"But it's a measured response to try and put hurdles in the way of those who seek to bring international terrorism."