The battle against extremism could lead to a “drift towards a police state” in which officers are turned into “thought police”, one of Britain’s most senior chief constables has warned.

Sir Peter Fahy, chief constable of Greater Manchester, said police were being left to decide what is acceptable free speech as the efforts against radicalisation and a severe threat of terrorist attack intensify.

It is politicians, academics and others in civil society who have to define what counts as extremist ideas, he says.

Fahy serves as chief constable of Greater Manchester police and also has national counter-terrorism roles. He is vice-chair of the police’s terrorism committee and national lead on Prevent, the counter radicalisation strategy.

He stressed he supported new counter-terrorism measures unveiled by the government last week, including bans on alleged extremist speakers from colleges.

Fahy said government, academics and civil society needed to decide where the line fell between free speech and extremism. Otherwise, he warned, it would be decided by the security establishment, so-called “securocrats”, including the security services, government and senior police chiefs like Fahy.

Speaking to the Guardian, Fahy said: “If these issues [defining extremism] are left to securocrats then there is a danger of a drift to a police state”. He added: “I am a securocrat, it’s people like me, in the security services, people with a narrow responsibility for counter-terrorism. It is better for that to be defined by wider society and not securocrats.”

Fahy said officers were also having to decide issues such as when do anti-gay or anti-women’s rights sentiments cross the line, as well as when radical Islam veers into extremism: “There is a danger of us being turned into a thought police,” he said. “This securocrat says we do not want to be in the space of policing thought or police defining what is extremism.”

Fahy cited the example of protests this summer outside a Manchester beauty shop which sells Israeli products. It was targeted during protests against Israel’s attack on Gaza, where many civilians were killed. The shop complained after pro-Palestinian and pro-Israeli protesters gathered outside to vent their passionately held views. Fahy said police ended up trying to decide in the midst of protests what was extremist: “It is better for others in society to have that debate and not to have public order commanders decide that on the street, outside a shop.”

However, the chief constable also said universities and colleges had to improve their efforts identifying extremist speakers on campuses, to spare police having to decide: “If schools and universities do not step up, it leaves a gap, where police are asked to intervene. Institutions should have policies in place identifying who is vulnerable, to keep the police out of schools and education.”

Fahy said concerns about academic freedom should not stop schools and colleges playing their part to counter extremism. He said schools and colleges would report youngsters vulnerable to gangs or serious self-harm, but claimed there was a reluctance to report youngsters at risk of radicalisation: “We are talking about vulnerable people going out to become a Jihadi bride, which is sexual exploitation and rape.

“The police service does not want to be in school or on university campuses controlling thought, but the best way to avoid this is for such institutions to have procedures to know the messages which are being promoted and for student bodies to have policies on whether preaching hatred towards homosexuality, allowing segregated meetings or advocating violent action overseas is acceptable or not.”

Fahy said the Prevent programme had seen police officers visiting venues due to hold meetings to ensure they knew who was speaking, about extremists radicalising or brainwashing people.

Under the Conservative-led coalition government, there has been increased focus on countering extremist thought and rhetoric, even if espoused by non-violent groups, based on the theory it helps people to be radicalised and then move on to supporting terrorism or wanting to carry out violent acts. The theory is disputed.

Fahy said elected politicians and civic society needed to ask and answer questions about free speech’s limits: “When does anti-Israeli protest become antisemitic? How far is it OK to challenge homosexuality, women’s rights? How far is it OK to advocate violent action abroad?”

He added: “These are difficult issues for Muslims and the Catholic church … Extremism is not just about Muslims, there are a lot of rightwing extremists.”He gave another example about the opposition some fundamentalist Christians have to homosexuality: “If that speaker, says all homosexuals are sinful, are mentally defective and need reprogramming and are threat to society, is that preaching hatred?”

Fahy said police had agonised over the definition and he accepted the definition can change.

For instance the preaching of hate speech against homosexuals could today be deemed unacceptable.

But as recently as the 1986, a previous Greater Manchester chief constable, James Anderton, was attacked for being homophobic after saying HIV patients were “swirling around in a human cesspool of their own making”.

Fahy said the debate about what is and what isn’t extremism needs to be publicly heard as do arguments against extremism, so the young are not just exposed to views on the internet which have been linked to the phenomenon of self-radicalisation: “That’s the big change in the last two or three years. While before worried about preachers of hate, now the young are brainwashed on the internet in their bedrooms.”

The Conservative-led coalition’s counter-terrorism policy, Contest, was unveiled in 2011 and tried to link non-violent extremist idea to terrorist violence: “Some terrorist ideologies draw on and make use of extremist ideas which are espoused and circulated by apparently non-violent organisations, very often operating within the law ... But preventing radicalisation must mean challenging extremist ideas that are conducive to terrorism and also part of a terrorist narrative. Challenge may mean simply ensuring that extremist ideas are subject to open debate.”