Prostitution laws should be urgently rewritten so sex workers are no longer criminalised for soliciting, a major new Commons report has argued.
Brothel-keeping rules should also be adapted so prostitutes can share premises rather than placing themselves at risk by working alone, the Government was told.
In another measure, MPs called for previous convictions and cautions for prostitution to be deleted from sex workers' records.
The steps were outlined by the Home Affairs Select committee as it published an interim report after launching its first inquiry into the issue.
In England and Wales the acts of buying and selling sex are not in themselves illegal but associated activities such as soliciting, kerb crawling and brothel-keeping are outlawed.
The committee raised concerns that treating soliciting as an offence is having an adverse impact in terms of preventing sex workers from seeking help to leave prostitution and exposing them to abuse and violence.
Having a criminal record for prostitution-related offences often creates an insurmountable barrier for those wishing to move into "regular" work, the study said.
It added that the current law on brothel-keeping means some are often too afraid of prosecution to work together at the same location and as a result often compromise their safety by working alone.
Labour MP Keith Vaz, chairman of the committee, said there was "universal agreement" that elements of the present law are "unsatisfactory".
He said: "Treating soliciting as a criminal offence is having an adverse effect, and it is wrong that sex workers, who are predominantly women, should be penalised and stigmatised in this way.
"The criminalisation of sex workers should therefore end."
The committee stressed that the power to prosecute those who use brothels to control or exploit sex workers should be kept, along with a "zero tolerance" approach to criminal exploitation.
A range of legal regimes on prostitution are in place around the world, with France and Northern Ireland recently passing laws which made it illegal to pay for sex.
In 1999, Sweden became the first country to introduce a model which criminalised buying sex - but not selling it.
There have been calls for a "sex buyer" law to be introduced in Britain following claims that enforcement is unfairly targeted at female sex workers rather than male "buyers".
The committee said it was not yet convinced that the approach would be effective in reducing demand or improving the lives of sex workers.
Mr Vaz added: "The committee will evaluate a number of the alternative models as this inquiry continues, including the sex-buyers law as operated in Sweden, the full decriminalised model used in Denmark, and the legalised model used in Germany and the Netherlands."
Figures suggesting that around one in 10 (11%) British men aged 16 to 74 have paid for sex on at least one occasion and estimating that there are around 72,800 sex workers in the UK were among those cited in the report.
The committee said an in-depth research study was needed to develop a better understanding of the extent and nature of prostitution in England and Wales.
The English Collective of Prostitutes welcomed the report and called for an immediate moratorium on arrests, raids and prosecutions.
Minister for Preventing Abuse, Exploitation and Crime Karen Bradley said: "The Government is committed to tackling the harm and exploitation that can be associated with prostitution, and believes that people who want to leave should be given every opportunity to find routes out.
"We need to ensure that the law enables the police and others to tackle these harms, and target those who exploit vulnerable people involved in prostitution.
"We will carefully consider the recommendations made by the Home Affairs Select Committee Inquiry and respond in due course."
The International Union of Sex Workers (IUSW) gave a "cautious" welcome to the report in stressing the need for accurate and comprehensive data to back decision-making and its recognition that consensual sex work is different from trafficking and exploitation.
The IUSW said it was seeks a legislative approach that tackled violence against sex workers and also enabled effective public health policy and efficient use of resources. It believes that "full decriminalisation ... is the best way to achieve this".
It pointed to the example of New Zealand where sex workers have successfully prosecuted brothel keepers for sexual harassment and clients for removing condoms.
The IUSW said the police there are clear that sex workers deserve the full protection of the law against violence, harassment and abuse.