Sheffield MP Paul Blomfield is among a cross-party group of MPs and peers which has recommended that immigration detention should be capped at 28 days.
The group, All Party Parliamentary Group on Refugees and Migration, ruled that Home Office officials are failing to follow guidance that immigration detention should be used sparingly.
The UK is the only country in the EU not to have a time limit on detention, when immigrants are waiting for decisions on asylum applications, the group said in its report.
It added that the lack of a time limit impacts on the mental health of detainees and suggested that the Government should look at alternatives to detention including allowing individuals to live in the community.
Women who are victims of rape and sexual violence should not be detained and pregnant women should never be detained for immigration purposes, the group recommends.
Paul Blomfield MP, vice-chairman of the panel and Labour MP for Sheffield Central, said: “Current Home Office policy is that detention should be used as a last resort and for the shortest possible time.
“From the evidence that we heard, Home Office standard practice falls well short of this policy.
“In our report, we recommend that far fewer people should be detained, that detention should always be a last resort, and that it should only ever be for a maximum of 28 days.
“Other countries manage to maintain immigration control without resorting to indefinite detention. So can we.”
Refugee Council chief executive Maurice Wren said: “The British Government is detaining too many people for too long.”