Justice secretary wants to dramatically reduce the length of time ex-offenders must declare their convictions

The justice secretary, Kenneth Clarke, is to "wipe the slate clean" for hundreds of thousands of offenders by dramatically shortening the period during which they are obliged to tell potential employers about their criminal past.

The radical reform of the 1974 Rehabilitation of Offenders Act will see the time after which the convictions of medium-term prisoners are "spent" reduced from 10 years to four.

The convictions of short-term prisoners, serving sentences up to six months, will be spent after two years instead of the current seven.

The proposed reform will also cover hundreds of thousands of people who have recently been fined or ordered to serve community sentences. They will no longer have to declare their criminal record after one year instead of the current five.

The changes will raise the threshold for prison sentences that are never spent from two and half years to four, on the basis that sentence lengths are much longer now than when the period was fixed in 1974.

One factor that will limit the impact of the changes is that the period after which a conviction is spent will be counted from the day an offender completes their sentence rather than, as currently, from the date of their conviction. In the case of someone serving a prison term of two and a half years, this means it will become spent after six and a half years, rather than 10.

The sweeping reductions in the periods after which convictions no longer have to be declared are the first changes to be proposed for nearly 30 years and are intended to be applied retrospectively. They will affect hundreds of thousands of offenders who have been convicted or served time in the last five years.

The proposals are likely to provoke a fresh clash with Conservative backbenchers when Clarke asks them to vote through the changes as government amendments to his legal aid, sentencing and punishment bill.

Clarke expects "a bit of a row" over the move, according to a tweet from the BBC's home editor, Mark Easton.

The justice minister Lord McNally said the changes were being made because it was "no good for anyone if they go to jail and come out and then can't get an honest job and so turn back to crime again". He said they would give offenders who had served their sentence a fair chance of getting back on the straight and narrow.

The Confederation of British Industry backed the changes. Katja Hall, CBI chief policy director, said that giving offenders the chance of a job when their sentence was complete could significantly reduce re-offending rates.

"These changes could help more offenders who have served their sentences to get jobs, assisting their rehabilitation. This benefits not only the offender but also the taxpayer and wider community by reducing the costs of repeat offending," she said.

"The most serious crimes will always need to be disclosed, but these new arrangements are a more proportionate balance between the seriousness of the offence committed and a prospective employer having the right information to assess the risk."

The reform was first proposed 10 years ago by Labour in a Cabinet Office social exclusion unit report on getting more ex-offenders into work.Ministers are basing their proposal on recent evidence that reoffending rates among ex-prisoners tail off sharply after two years.

Those who apply for jobs in sensitive areas such as working with children or vulnerable adults, in law enforcement, or high-level financial positions will have to declare any criminal record to potential employers and are exempt from the provisions.

Paul McDowell, chief executive of Nacro, the crime reduction charity, welcomed the changes but said they did not go far enough. "These long-overdue reforms will significantly help those people who have offended in the past and are now living law-abiding lives. These people face barriers to employment because of old criminal records hanging around their necks," he said.

But he said the 1974 act would still present barriers to people who had put their offending behind them, particularly those who had served four or more years in prison.