New prostitution laws to be set out today will mean a plea of ignorance is no defence for men facing prosecution for buying sex from a woman who has been trafficked or is being exploited by a pimp.

Under proposals to be published today by the home secretary, Jacqui Smith, a man who "knowingly" pays for sex with a woman who has been trafficked or is under the control of a pimp could face a charge of rape, which carries a potential life sentence.

The new offence of paying for sex with somebody who is "controlled for another person's gain" is to carry a hefty fine and a criminal record.

The decision to criminalise men who pay for sex with trafficked women is likely to have a widespread impact. The Metropolitan police have estimated that 70% of the 88,000 women involved in prostitution in England and Wales are under the control of traffickers.

It forms part of a wider package of reforms to tackle street prostitution, including prosecuting first-time kerb crawlers and implementing stronger police powers to close down brothels.

The package marks a sharp change of approach for Labour, which four years ago proposed a partial decriminalisation of prostitution in red-light "tolerance zones", and then powers to allow two or three women to work together in a brothel to provide protection for each other. The first proposal, by the former home secretary David Blunkett, was blocked by Downing Street, reportedly because of fears of a hostile media response.

Despite some expectations, today's package will not include changes to the licensing of lapdancing clubs, although Smith has indicated that proposals will be made in future to regulate them on the same basis as sex shops. This is expected to give residents stronger powers to object and to lead to the closure of some clubs, especially in residential areas.

The change in the law follows a six-month Home Office-led review of prostitution laws which included visits by ministers, including Harriet Harman and Vernon Coaker, to Amsterdam and Stockholm to see how the law worked there.

Harman has described the flow of women brought into Britain by human traffickers as "a modern slave trade", and said that it only exists because men are prepared to buy sex: "So to protect women we must stop men buying sex from the victims of human trafficking."

The home secretary has made clear that under the new offence it will not be enough for a man to say "I didn't know". The new offence will include a "strict liability" test so that police will only have to prove that the man paid for sex, and that the woman had been trafficked. There will be no need to prove he knew it at the time.

The tougher approach will allow first-time kerb crawlers spotted by the police to be prosecuted. At present, the police can only prosecute persistent offenders. Police will get powers to close down brothels where there is evidence of trafficking.

The former Home Office minister Fiona Mactaggart yesterday warned that the new criminal offence of paying for sex with a trafficked woman might fall apart in practice, and said there had been no prosecutions in Finland, the only other country where it had been made law.

The English Collective of Prostitutes said yesterday that experience had taught them any law against consenting sex forces prostitution further underground and makes women vulnerable to violence.

Key facts

· Men to be prosecuted if they pay for sex with women who are trafficked or under control of a pimp

· Ignorance that woman was being controlled not to be a defence and conviction to carry hefty fine and criminal record

· Men who knowingly pay for sex with trafficked women may face rape charges

· First-time kerb crawlers face prosecution and naming and shaming