British Director of Prosecutions Keir Starmer said that offensive comments on social networking site Twitter are not likely to lead to criminal charges unless the comments include threats.
Starmer suggested that prosecutions would not be brought over one-off jokes made online, even if they were offensive.
He, however, said that so-called Internet 'trolls', who carry out sustained attacks on individuals or make 'grossly offensive or threatening' remarks will still be taken to court, as will those who break gagging orders.
According to the Telegraph, Starmer said that the first guidelines would be drawn up for police, courts and prosecutors on how to deal with the 'difficult' issues raised by social media, where hundreds of millions of messages are posted every day.
His comments came as the Crown Prosecution Service decided not to take action against a Welsh footballer who made a homophobic joke on Twitter about the Olympic divers, Tom Daley and Peter Waterfield.
It said that Daniel Thomas's 'misguided' tweet was meant to be humorous and was not directed at the pair, and he quickly deleted it and expressed remorse, the report said.
"This is not just a matter for prosecutors. Social media is a new and emerging phenomenon raising difficult issues of principle, which have to be confronted not only by prosecutors but also by others including the police, the courts and service providers," Stamer said.
"The fact that offensive remarks may not warrant a full criminal prosecution does not necessarily mean that no action should be taken. In my view, the time has come for an informed debate about the boundaries of free speech in an age of social media," he added.