A teenager who claims to have been stopped and searched "more than 20 times" has told ITV News he welcomes the government's review.
Infuriating politicians, the Court of Appeal said it was not relevant that terror suspect Abu Qatada was regarded as "extremely dangerous".
Abu Qatada has been described as "a truly dangerous individual", using human rights, he has made a series of challenges against deportation.
Nick Pickles, director of privacy and civil liberties campaign group Big Brother Watch, said:
The fact that just 9% of stop-and-searches lead to an arrest clearly demonstrates that the current system is not working.
Under the last Government, stop-and-search spiralled out of control, with hundreds of thousands of innocent people stopped and searched without any good reason.
If public confidence in the police is to be maintained, these sort of powers must be used in a far more targeted way and the pilot schemes already undertaken demonstrate this is possible without jeopardising public safety.
Today's statement is an important step towards ensuring the public, particularly people from ethnic minorities, can have confidence that they can walk the streets without fearing they will be subject to further unjustified use of stop-and-search powers.
Theresa May, who is understood to have a particular interest in stop and search and its use, is set to announce a fresh consultation on the powers in the House of Commons to ensure they are being used fairly.
The move comes just a few weeks after the Government's equality watchdog said police forces are being fairer and more efficient in their use of stop-and-search powers.
The Equality and Human Rights Commission (EHRC) found that five forces, including the Metropolitan Police, had reduced their use of stop and search powers without compromising crime reduction.
In addition, Mrs May has asked Her Majesty's Inspectorate of Constabulary to report on how the police use these powers and their report is due within a few weeks.
In 2010, the EHRC's Stop And Think report showed that at that time, nationally, black and Asian people were respectively six and two times more likely to be stopped and searched than white people.
As a result of an 18-month action programme supervised by the Commission, all but one of five forces covered saw drops in their disproportionate use of stop and search against black and Asian people.
In 2010, the government's equality watchdog released a report on the use of stop and search powers in 42 policing areas over five years.
The report concluded that "racial stereotyping and discrimination are significant factors" in the varying rates at which people are stopped and searched.
- Black people six times more likely to be stopped and searched than white people
- Asian people twice as likely to be stopped and searched than white people
- Some of the highest racially disproportionate rates were seen in the West Midlands, Thames Valley, West Mercia and South Yorkshire
A follow-up trial with five police forces found that they were able to reduce their use of stop and search power by up to 50 percent while continuing to see a reduction in crime rates.
Home Secretary Theresa May has told MPs that a new treaty signed by the British and Jordanian governments will "finally make possible" the deportation of the radical cleric Abu Qatada.
Qatada, who lives in London, faces terror charges in Jordan.
His legal team claims evidence obtained by torture could be presented in a re-trial.
But Mrs May also warned that even with the treaty, Qatada can still appeal against any new rulings on his extradition.
Conservative MP Mark Reckless has criticised Theresa May’s legal strategy over the attempted deportation of Abu Qatada – but added that she has one more chance to succeed.
He said: “The Home Secretary has pursued throughout the wrong legal strategy, she’s got one last chance and what she needs to do is to put the key constitutional questions to the Supreme Court – who has the last word, Strasbourg or the Supreme Court?
"If she does that, I think she can still win.”
The Court of Appeal turned down May’s attempt to take to the Supreme Court her fight to have Qatada deported and she will now appeal directly to the highest court in the country.
Reckless added: “There is a real chance but she needs a proper point of law to argue…
“She needs to make this big constitutional argument because we can win that.”
Home Secretary Theresa May will make a statement in Parliament tomorrow on preacher Abu Qatada.
The Government was today refused permission to take to the Supreme Court its fight to remove Qatada from the UK.
Shadow Home Secretary Yvette Cooper has criticised Theresa May's efforts to deport Abu Qatada, saying her strategy has "completely failed".
She said: “A year ago Theresa May promised Abu Qatada would soon be on a plane. Now it is clear her legal strategy has completely failed...
“Theresa May failed to appeal against the European Court decision last year. It is no good the Home Secretary blaming the Court when she didn't appeal when she had the chance."
The Government has been refused permission to take its fight to remove preacher Abu Qatada from the UK to the Supreme Court, but the affair is not at an end.
The Home Office will now request permission to appeal directly to the Supreme Court.
Three Supreme Court justices are expected to consider that appeal, which is set to be presented on paper rather than in the form of a full hearing.
The decision could be overturned if the justices are convinced there is a "point of law of general public importance".
The Government could still apply directly to the Supreme Court in a bid to take the case further.
The normal process is to submit a permission to appeal application which would then be considered by three Supreme Court justices.
They would decide whether or not the application raised a point of law of general public importance.
– Home Office spokesperson
We are disappointed with the Court of Appeal's decision but will now request permission to appeal directly from the Supreme Court.
The Government remains committed to deporting this dangerous man and we continue to work with the Jordanians to address the outstanding legal issues preventing deportation.