Speaking in the House of Lords, John Gilbert said Britain could use the radiation warheads "to create cordons sanitaire along various borders where people are causing trouble".
"Your Lordships may say that this is impractical, but nobody lives up in the mountains on the border between Afghanistan and Pakistan except for a few goats and a handful of people herding them," he said last week.
"If you told them that some ERRB (Enhanced Radiation Reduced Blast) warheads were going to be dropped there and that it would be a very unpleasant place to go, they would not go there. You would greatly reduce your problem of protecting those borders from infiltration from one side or another.
"These things are not talked about, but they should be, because there are great possibilities for deterrence in using the weapons that we already have in that respect."
Neutron bombs are a type of thermonuclear weapon designed to kill people while leaving physical structures such as buildings in tact.
Responding for the government Jim Wallace said the coalition did not share the "rumbustious views" of Gilbert.
Gilbert, who served Tony Blair in the late 1990s as a defence minister and was a member Intelligence and Security Committee while he was an MP, said he did not favour a nuclear-free world.
"I am absolutely delighted that nuclear weapons were invented when they were and I am delighted that, with our help, it was the Americans who invented them," he explained.
"If we think of a world in which they had not been invented, it is very easy indeed to see world war three starting on many occasions after 1945."
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