At a Children's Society fringe event at the Conservative conference, Loughton said the creation of the vetting and barring scheme amounted to a "cotton-wool, risk-averse mentality that is counter-productive".
Under the new scheme, which comes into force next week, anyone who has contact with children at least once a month will need to register with the new Independent Safeguarding Authority (ISA).
Loughton said the demands of the new procedures would make adults more fearful of going near children. He added: "It will make young people less prepared to deal with the real perpetrators of abuse."
Children's Secretary Ed Balls has asked ISA chair Roger Singleton to carry out a review of the scheme, including what counts as "frequent" and "intensive" contact with children.
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