Lord Falconer of Thoroton called for a change of culture in the legal profession to stop lawyers boosting their fees by stretching out cases.

The Home Office minister echoed the fears of a report by the Audit Commission that procrastination and other errors were also allowing offenders to "evade justice".

The study suggested an overhaul of how lawyers are paid to ensure they benefit from resolving cases promptly, rather than by "unnecessarily prolonging" proceedings. It also proposed fines for those who stall matters either to boost income or through inadequate preparation.

Its findings elicited a swift response from the Bar Council and Law Society, which insisted there was no evidence to substantiate the claims.

But Lord Falconer backed the financial watchdog's call for an overhaul yesterday, insisting "urgent reform" was needed because there was now a "deep and profound sense" that the criminal justice system was failing. The minister, a lawyer himself, said: "If the longer [the case] goes on the more chance the defendant slips through the crack, the motive for lawyers is to stretch the process out." He said a system where "complexity and delay" were built in had to be changed to encourage guilty defendants to make early guilty pleas.

"That is the culture of the criminal justice system," he said. "You have got to change it to one where speed, not in any way compromising fairness, is important." Solicitors and barristers also played a part by over-aggressive questioning of witnesses in court, he added.

A White Paper on criminal justice, expected to suggest speeding the trial process and disclosing a defendant's past in certain circumstances, is to be published next month.

Building "incentives" and changing the fee structure, as the Audit Commission report suggested, would improve the system and make it more effective, Lord Falconer suggested. The report highlighted a gap between the 5.2 million crimes recorded in 2000 and 2001 and the 326,000 offenders sentenced in court.

"The criminal justice system could be more efficient and effective in bringing offenders to trial, making best use of the punishments available and ultimately in preventing and reducing crime," it stated. Enough money to pay for an extra 3,800 police officers was squandered by "delays and inefficiencies throughout the system", it added. Other reasons for inefficiencies included officers initially charging suspects with the wrong offence, information from the police national computer being out of date, and trials held up by delays in the forensic science service.

But sentencing did not deter criminals from reoffending, and they were often not receiving the support and rehabilitation they needed to help them, the report said.

The Law Society, which represents 80,000 solicitors, insisted the regulator's conclus-ions were "simply not right". Janet Paraskeva, the chief executive, said: "The payment systems for lawyers is based on standard fees rather than payment by the hour so they provide a powerful disincentive to lawyers stringing out cases."

A Bar Council spokesman added: "Recent reforms, which are beginning to bite, have removed the overwhelming majority of incentives to prolong cases, which are categorised and paid according to type. Judges have full powers to penalise lawyers who unnecessarily drag out cases.

"It is a breach of the Bar's rules to make a case go on unnecessarily and we would consider complaints from any party who believes that was going on."

Profile: The Labour barrister who earned £500,000 a year

Lord Falconer is no stranger to the financial rewards to be reaped from the legal profession. As a barrister who built a formidable reputation – first as an employment specialist and then as a more broadly commercial lawyer – his salary was reputed to be £500,000 a year in 1997 when he took a post in the Government and a large pay cut.

Despite his allegiance to the Labour Party, much of his legal work was not very left-friendly. He advised British Nuclear Fuels in a series of cases against leukaemia victims and Greenpeace activists, and he represented British Coal against the unions over pit closures.

The son of an Edinburgh solicitor, Charles Leslie Falconer – who would become Baron Falconer of Thoroton in Nottinghamshire – chose a legal career after reading history and law at Queen's College, Cambridge.

Instead of following his father into the family practice, he became an English barrister and was called to the Bar at Inner Temple in 1974, becoming a silk in 1991. In 1997, he was elected Master of the Bench of the Inner Temple. Peter Scott QC, the head of his chambers at Fountain Court, described him as "very popular" with a "strong sense of responsibility". Others spoke of his good nature, lack of pomposity and infamous untidiness.

He was enticed from his lucrative practice when his old friend Tony Blair offered him the job of Solicitor General after the 1997 election. "Money is not the most important thing," he said.