The foreign secretary, David Miliband, today declared that the use of the phrase "war on terror" as a western rallying cry since the September 11 attacks had been a mistake that may have caused "more harm than good".

In an article in today's Guardian, five days before the Bush administration leaves the White House, Miliband delivered a comprehensive critique of its defining mission, saying that the war on terror was misconceived and that the west cannot "kill its way" out of the threats it faces.

This morning in Mumbai he repeated that message in a speech delivered in the Taj Mahal hotel, one of the targets of the attacks in November that left more than 170 people dead.

He applied his theme to regional tensions, urging further restraint from India in the wake of the attacks, which originated in Pakistan, according to British and Indian intelligence.

Miliband also defended himself and the British government from the accusation of political cowardice for not publicly airing deep policy differences with the Bush administration years ago.

Edward Davey, the Liberal Democrats' foreign affairs spokesman, said today: "If the British foreign secretary had said this to President Bush many months, if not years ago, then it would have deserved some credit. Mimicking President-elect Obama's lines days before his inauguration does not show leadership."

"Judge us by our actions as well as our words," Miliband said, claiming that British counter-terrorism strategy had been "consistent" and not guided by the "war on terror" mentality.

British officials said that the timing of the speech was dictated more by the Mumbai attacks than by George Bush's departure next week, but added that the fact that a transition in Washington was under way meant that the foreign secretary had been able to use stronger language than would have been the case while the Bush administration still held power in Washington.

British officials quietly stopped using the phrase "war on terror" in 2006, but this is the first time it has been comprehensively discarded, in the most outspoken remarks on US counter-terrorism strategy to date by a British minister.

Miliband described the "war on terror" approach as "misleading and mistaken".

"Historians will judge whether it has done more harm than good," he said, adding that, in his opinion, the whole strategy had been dangerously counterproductive, helping otherwise disparate groups find common cause against the west.

"The more we lump terrorist groups together and draw the battle lines as a simple binary struggle between moderates and extremists or good and evil, the more we play into the hands of those seeking to unify groups with little in common, and the more we magnify the sense of threat," Miliband argued, in a clear reference to the signature rhetoric of the Bush era. "We should expose their claim to a compelling and overarching explanation and narrative as the lie that it is."

The foreign secretary pointed to the statement on Gaza issued earlier this week by Osama bin Laden, which he portrayed as the al-Qaida leader's attempt to capitalise on the crisis, although he had not made much of the Palestinian issue when he began his terrorist career in the 1990s.

"Terrorism is a deadly tactic, not an institution or an ideology," Miliband said.

He argued that "the war on terror implied a belief that the correct response to the terrorist threat was primarily a military one: to track down and kill a hardcore of extremists". He quoted an American commander, General David Petraeus, who said that the western coalition in Iraq "could not kill its way out of the problems of insurgency and civil strife".

Miliband said that western solidarity "should not be based on who we are against but instead on the idea of who we are and the values we share".

To stay true to those values, "democracies must respond to terrorism by championing the rule of law, not subordinating it."

Miliband linked the argument with US detention policy. "That is surely the lesson of Guantánamo and it is why we welcome President-elect Obama's clear commitment to close it," he said, referring to the US detention camp in Cuba.

After the al-Qaida attacks of 11 September 2001, the Bush administration presented the threat of a global terrorist onslaught as justification for pre-emptive military action, long-term detention without trial and severe interrogation techniques widely denounced by human rights groups as torture.

A senior Bush administration official admitted this week for the first time that a Guantánamo detainee was tortured by the US military.

The incoming Obama administration is expected to avoid using the term "war on terror" and adopt a more multilateral and less military-focused approach to global threats.

British officials are signalling, in increasingly public ways, that they cannot wait for the new team to take office next Tuesday and wave goodbye to an eight-year administration with which they felt increasingly ill at ease, particularly following the departure of Tony Blair as prime minister in 2007.

Miliband said last night that the incoming administration's "instinctive multilateralism" and proposed use of "smart power" meshed with his arguments. "The new administration has a set of values that fit very well with the values and priorities I am talking about," he told the Guardian.

UK-US relations have been particular sour in recent days after Washington reneged on a pledge to back a largely British-drafted UN resolution calling for a ceasefire in Gaza. The White House overruled US diplomats after a demand from the Israeli prime minister, Ehud Olmert, reports have claimed.