Broadcaster Paul Gambaccini has backed a 28-day limit on the use of police bail after telling MPs he was the victim of a "witch-hunt".
Mr Gambaccini was arrested on suspicion of historical sexual abuse and placed on bail for a year before the case against him was dropped in October.
He told a Commons committee that lost earnings and legal fees had cost him more than £200,000.
The Director of Public Prosecutions (DPP) denied there was a "witch-hunt".
Home Secretary Theresa May announced in December that she was consulting on a 28-day bail limit in all but exceptional cases.
Giving evidence to the Commons Home Affairs Select Committee, the former Radio 1 DJ said he believed he was used as human "fly paper" to encourage other people to come forward and make allegations against him.
He said he suspected his bail was repeatedly extended until the end of high-profile cases involving other celebrities because police did not want juries to hear a former Radio 1 DJ had been cleared of sexual wrongdoing.
Mr Gambaccini, who has since returned to work on BBC Radio 2 and 4, was arrested by detectives from Operation Yewtree - the police investigation into historic sex offences launched in the wake of the revelations about former DJ and TV presenter Jimmy Savile.
He said that he and other celebrities falsely accused of historical sex crimes had been the victim of a "witch-hunt" to divert attention from the failure of the authorities to deal with Savile while he was still alive.
"Someone whose identity we do not know, who I call the Wizard of Oz, the person sitting behind the curtain, pulling the levers, setting off smoke and light shows, decided 'I've got a great idea, let's have a witch-hunt, let's divert the attention of the public from the police who knew about but failed to stop Jimmy Savile in his lifetime and shine that spotlight instead on his contemporaries and we'll get perverts from show business in the 1970s and 1980s'," he said.
He said that by opening a website and phone line so that people could accuse celebrities of sexual offences "you are going to get some people who are responding to the offer of money and attention".
'Misuse of power'
Mr Gambaccini was arrested on 29 October 2013 and police handed papers to the Crown Prosecution Service on 10 February 2014.
But it was not until 10 October 2014 that he was told no case was being brought against him, he said.
Mr Gambaccini told the committee that during that time his bail was extended on seven occasions with only "vague" explanations from police.
He said he gradually realised the dates often coincided with important developments in the Yewtree investigation.
Bail was extended on 2 May, when publicist Max Clifford was sentenced for historic indecent assaults, on 30 June, hours after the conviction of Rolf Harris, and on 12 September when former Stoke Mandeville doctor Michael Salmon appeared in court charged with rape, he said.
When his bail was extended to 15 September, he suspected a link to the trial of Dave Lee Travis, which was due to end on that date.
Mr Gambaccini said the BBC suspended him without pay immediately after his arrest became public and he was "shunned" by other employers.
Asked if he would support anonymity for those arrested, but not charged, over sexual allegations, Mr Gambaccini said: "Absolutely. I do realise that there are people of good faith who say people who have been arrested should be named because then people who have been victimised will come forward.
"These people of good faith don't realise that it isn't only people who have actually committed offences who are arrested and named - there are some innocent people in the mix."
He said he would "enthusiastically" support a 28-day bail limit, adding: "There is no possible excuse for further delay in leaving somebody out to dry.
"The only reason for the delay is to try to get somebody else to accuse you.
"It's not a proper use of the criminal justice system, it's the misuse of a power they happen to have for other reasons."
But DPP Alison Saunders - the most senior prosecutor in England and Wales - said the 28-day limit was "too short" because decisions on whether to press charges take substantially longer in a minority of cases, often involving fraud, corruption or historical sex offences.
She insisted that the CPS does not release the names of suspects before charge and stressed that a decision not to press charges is not a determination of innocence or guilt, but a judgment on whether there is sufficient evidence to secure a conviction.
Ms Saunders made clear she did not believe the Crown Prosecution Service (CPS) owed Gambaccini an apology.
She also denied claims made by Conservative MP Michael Ellis that the bail the system was "broken" and told the committee: "We are not conducting a witch-hunt against anyone, be it journalists or celebrities."