Some suspects arrested under terror laws should be released on bail, the independent reviewer on terrorism legislation has proposed.

David Anderson QC said some aspects of counter-terrorism legislation had been applied with "excessive enthusiasm", and that the law was now too complicated – too "bitty, messy and hard" to understand.

In his annual report he called for consolidation of the laws, and better controls at ports and airports, but also for more to be done to "reduce the intrusions of the law without endangering public safety".

His 142-page report points to several key areas of conflict between the requirements of security and liberty: allowing terrorist suspects bail, possible proscription of far-right organisations and improved coordination to stop and examine people moving through ports.

On the detention of terror suspects, the independent reviewer stated: "Consideration should be given to changing the law so as to allow persons arrested under section 41 of the Terrorism Act 2000 to apply to a court for bail.

It was a "notably wide power of arrest … because the arresting officer need have no specific offence in mind". This power, Anderson said, "may lawfully be used in respect of people who, though suspected of terrorism, will never be charged under terrorist legislation".

He explained: Every year a significant proportion of those arrested under section 41 are charged with offences under the ordinary criminal law, ranging from conspiracy to murder to possession of knives … peripheral players who pose no risk to public safety need not be kept in detention, and a charging decision would not have to be reached within 14 days. There are of course terrorist suspects for whom the grant of bail would be unthinkable: but the same is true of many suspects arrested."

The one area where improved controls might be needed, Anderson said, was schedule seven of the Terrorism Act 2000, which enables police, immigration and customs officers to question travellers at ports and airports. Port officers, reported Anderson, said they needed better advance information in passenger manifests, but also swifter removal of names from the Home Office warning index, to prevent "unjustified repeat stops which can be particularly damaging to community relations".

Terrorism legislation was too complex, he said. "Counter-terrorism law in the UK is bitty, messy and hard for even its practitioners to comprehend as a whole. Consolidation would aid comprehension all round, not least in other countries which are sometimes urged to follow the UK's legislative example."

"Untidiness is not the only vice of UK counter-terrorism law," Anderson said. Terrorism law, he said, at times "gives excessive weight to the idea that terrorism is different, losing sight of the principle that terrorism is above all crime, and that special laws to deal with it need to be justified by the peculiar nature of the crime."

He added: "Elements of [the law] have been conceived and applied with excessive enthusiasm."

Despite criticism of the European court of human rights by right-wing politicians and tabloids, Anderson praised "the courts both in London and in Strasbourg [for] some crucial interventions of their own, notably in helping to end the old systems of detention without trial … and stop and search, and in improving the operation of the closed material procedures that were used in control order cases".

He said: "These judgments have, in a number of respects, affirmed the importance of liberty and due process, without, so far as I can judge, causing an unacceptable increase in risk. In countless lesser judgments, courts and tribunals have smoothed the rough edges of legislation and enabled it to be applied consistently with commonly accepted standards of fairness."

On the question of banning groups believed to constitute a terrorist risk, he observed: "If there are far-right terrorist organisations in the UK that meet the statutory requirement for proscription, their possible proscription should be considered according to the same discretionary criteria as have been applied to UK organisations concerned in al-Qaida-related terrorism.

"Some Muslims believe that there is a greater readiness on the part of press, politicians, police and law enforcement officers to characterise attacks by Muslims as terrorism than attacks by far-right extremists. This, they say, results in discriminatory sentencing and cements popular perceptions of terrorism, at least in Britain, as crime perpetrated overwhelmingly by Muslims.

"I have not found evidence of such discrimination … However, the extreme breadth of the definition of terrorism in UK law, and its possible overlap with other crimes ranging from offences against the person to the stirring up of racial hatred, point up the need for vigilance."

Anderson suggested the definition of terrorism was also too broad, criminalising actions overseas that constituted lawful hostilities under international humanitarian law – such as, for example, UN-sanctioned use of force, and acts of violent rebellion against oppressive governments.

But he noted: "The government might be reluctant to surrender the right to treat its opponents in foreign theatres of war (or even students who post videos of their exploits) as terrorists.

"The current law allows members of any nationalist or separatist group to be turned into terrorists by virtue of their participation in a lawful armed conflict, however great the provocation and however odious the regime which they have attacked."