Breach of a new community safety order available from the courts would be a criminal offence. Mr Straw said the order would be modelled on best practice of councils like Lewisham, Southwark and Manchester.
Official figures show that racial incidents have doubled since 1988, with an 8% increase last year alone. Labour is also committed to creating two new criminal offences - of racial harassment and racially motivated violence - to tackle racist crime.
Speaking to the local authority working group on anti-social behaviour at the House of Commons, Mr Straw said:
'Official figures show that racial incidents have doubled since 1988, with an 8% increase last year alone. In part this rise is due to an increase in the reporting of such incidents, and more accurate recording by the police.
'Even so, it appears that a high proportion of incidents are still not being reported to the police for fear of intimidation. This is particularly true of racial harassment, which research shows is frequently carried out by neighbours.
'That is why we are proposing the new community safety order to give the police and local authorities the powers they need to tackle the problem.
'The order could restrict the person named from approaching individuals, uttering threats or using racist behaviour, and could be obtained within the same proceedings as those for evictions. The order would be granted under rules of civil evidence with special protection for witnesses and victims.
'If a person breached the order, courts would be able to impose a full range of criminal punishments, including imprisonment.
'Our proposals for community safety orders have been welcomed by the Commission for Racial Equality, the Police Superintendents' Association and local authority associations.
'Many Labour local authorities are already doing excellent work to tackle the problem of racial harassment in neighbourhoods. Last year, Southwark was given a special award, sponsored by the CRE for its work in this area.
'No civilised society should tolerate racist behaviour of any sort. But it is not enough to condemn, We must take action. That is what Labour will do.'