Jacqui Smith is to order an overhaul of the use of the controversial powers which have seen councils target the public for trivial offences such as dog fouling, littering or "bin crimes".
Authorities will be told that use of the legislation, which was designed to tackle serious crime and terrorism, must be proportionate as part of a review of the code of practice.
A consultation will suggest only chief executives should authorise their use. It will also raise the prospect that some public authorities could be stripped of their powers.
It follows growing concern over the potential abuse of powers under the Regulation of Investigatory Powers Act (RIPA).
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