Liberal Democrat leadership hopeful Nick Clegg is warning of an "undercurrent of fear" in modern British life, accusing Labour and the Conservatives of exploiting anxieties "to scare voters into their arms".

The party's home affair spokesman said that the government is guilty of "hyperactive and often pointless legislation" in dealing with crime and terrorism, and claimed that "it is liberalism alone which offers a route out of the politics of fear".

"They [the public] will come to resent parties and governments who beat the drum of fear most loudly," he said.

"Instead, our response to fear - the liberal response - must be empowerment."

Speaking at the launch of a report on national security by think-tank Demos, the Lib Dem home affairs spokesman called for a new civil defence network which would enable the wider community to respond to emergencies.

He also outlined plans for community courts in every town and city in Britain.

"Those who commit minor but visible offences like vandalism should have to explain themselves to victims and members of the community," he said.

"Together they will be able to decide how offenders can make up for the damage they have caused."

The frontrunner in the leadership contest  also backs mandatory education and training in prisons, with payments for work by prisoners going to a victim compensation fund.

And he argued that the Lib Dem response to insecurity has been "mistaken".

"We have allowed ourselves to be painted into a corner of seeming like a party that doesn't take people's fears seriously," he said.

"Under my leadership - if, as I hope, I am elected next week to lead the party - that will change. I will never underestimate the power of fear."

Security

The Demos report called for a reform of security policies and warned that the government lacked a "clear and coherent" approach.

It said that a national security secretariat should be established and that every year the government should publish an assessment of key security issues, including organised crime and international terrorism

"Successive British governments have rarely taken a strategic approach to national security," said report author Charlie Edwards.

"Decisions remain focused on short-term initiatives.

"Worryingly, the overall approach is becoming less - not more - coherent. Governments lurch from one crisis to the next, neither protecting people, nor empowering them."