Ex-MI5 boss in secrets storm.
The Government said its stance was one of "regret and discontent" at the decision to publish her autobiography, Open Secret. Officials refused to comment on the call to change the 12-year-old Act.
And politicians accused her of opening the floodgates to other ex-members to discuss secrets.
Dame Stella, in an interview with The Guardian, which is serialising her book from Monday, said the law should be changed to allow former spies to talk about their experiences in the security services.
She also called for an independent review body to be set up to vet publications by senior Whitehall officials.
But former defence secretary Lord King, the chairman of Commons security and intelligence committee, said he thought Dame Stella had made a mistake in writing her memoirs.
He said: "The real danger here is, and the implication that comes out of some of this, is that somehow there doesn't need to be secrets any more, the Cold War's over and can't we just have full and frank exposure of everything.
"Now there do need to be secrets - the British intelligence services do have a reputation for integrity and protecting people's identity."
Lord King said he didn't think the book would be as mundane as Dame Stella believed, and that she had put the Government in a difficult situation.
He added: "The danger is the signal that it sends out to people is that the intelligence and security services from the very top are now prepared to talk about that they do.
"I've made clear already I thought it was a mistake, I think she shouldn't have done it."