The right balance may not have been struck between protecting the security of the British people and protecting their civil rights, David Laws said today.
The Liberal Democrat Minister said that it had been a "very difficult" issue for the coalition to manage, as he said the party was in the process of developing a new policy that it would present before the next election.
Mr Laws said: " The whole issue of secret courts has been very controversial amongst people in the country, including in our party. We've had a number of conference debates to date.
"Of course, there's a very difficult balance to be struck here, between safety of people in the country and the civil rights of every individual, their rights to know what information is being used against them and to be able to defend themselves properly in the court."
Six months after Lib Dem MPs and peers were asked to vote with the coalition in support of the Justice and Security Act, which allows some civil cases to be held privately, Mr Laws said the party had reservations about whether or not the Government had got that balance right.
He said: "What the party is saying is that we're not sure at the moment whether the balance between those things is right. We do understand we need to make sure that people who potentially are committing serious offences can be prosecuted, that secret intelligence can be taken into account without compromising our sources.
"We're going to try between now and the next general election to develop a new policy in this area to get the balance between those two conflicting priorities right."
Mr Laws' comments come three days before he is due to present a motion at the Lib Dem party conference in Glasgow, to be included in the party's manifesto themes document.
The document is understood to address a number of civil liberty issues. The decision to end their support for closed material proceedings in court is likely to be favoured by many Lib Dem activists.