The committee of MPs said that while "uncertainties" remain about the long-term health impact of the devices, they present "an opportunity to significantly accelerate already declining smoking rates".
The report, produced by the Commons Science and Technology Select Committee, says that cigarettes and e-cigarettes should not be considered as one and the same thing.
Committee chair Norman Lamb said: "E-cigarettes are less harmful than conventional cigarettes, but current policy and regulations do not sufficiently reflect this and businesses, transport providers and public places should stop viewing conventional and e-cigarettes as one and the same".
Spokeswoman Moira Gilchrist said: "We strongly support the recommendation for the relaxation of regulations that would allow smokers to be informed about the health benefits of alternatives to smoking such as e-cigarettes".
A committee of British lawmakers is urging the government to loosen restrictions on e-cigarettes as a way of cutting the smoking rate.
"We will carefully consider the evidence and recommendations made in this report and will respond in due course".
While it is illegal for people to buy e-cigarettes under the age of 18, there have been reports of children as young as 11 in South Holland seen vaping.
- So they could be more harmful than has been said?
"Those with mental ill health are being badly let down and NHS England appear to have failed to give this any priority", Lamb said. E-cigarettes are less harmful than conventional cigarettes.
"We do not want to see young people using e-cigarettes but if they are using e-cigarettes instead of smoking tobacco and they are doing less harm, then there is a slightly different argument there".More news: Google could launch smart speaker with display in time for the holidays
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The Department of Health and Social Care estimates e-cigarettes contribute to between 16,000 and 22,000 people successfully quitting smoking each year "who would not otherwise have done so had they used nicotine replacement therapies or willpower alone".
Speaking on Tuesday, Hazel said: "This study provides some insights into what the implications could be of long-term use of e-cigarettes".
This could include prescribing medically licensed e-cigarettes to assist smoking cessation efforts.
'E-cigs in teens are a gateway to subsequent smoking lit cigarettes and e-cig vapour contains a large number of toxins which in time will obviously harm users, and bystanders'.
- The government should continue to annually review the evidence on the health effects of e-cigarettes and extend that review to heat-not-burn products.
"There is no public health rationale for doing so", he said.
- The limit on the strength of refills should be reviewed as heavy smokers may be put off persisting with them-and the restriction on tank size does not appear to be founded on scientific evidence and should therefore urgently be reviewed.
Image copyright Getty Images Image caption MPs want greater freedom for industry to advertise e-cigarettes 'Stub' it out or puff away?
Approximately 2.9 million people in the United Kingdom now use e-cigarettes.
"The percentage of people smoking among those with mental health conditions remains stubbornly high, while it is declining in the general population".
MPs want to review a ban preventing such a move - as it would now be considered as tobacco advertising.