Having battled the extremists for the past three years alongside Syrian Democratic Forces, Macer Gifford said there was a “real risk” those returning could carry out terror attacks.
Earlier this month Max Hill QC spoke of “losing a generation” by automatically using the courts to punish those who have travelled to the war zone.
The terrorism legislation watchdog also called for a focus on “reintegration”.
But Mr Gifford, 30, from Cambridge, has issued a plea to the Government to sit up and listen as he believes it is not possible for former IS fighters to return and be reformed.
“As someone who has been out here and seen what the Islamic State is like on the ground and what they have done to the people – this is a wake-up call and a warning to Britain,” he said.
“When I see a man like this official who said he wants these young people back, when I see them saying this on national television – you are inviting the wolf to dinner.”
Mr Gifford, a former London-based banker, who uses a pseudonym to protect his family, said the fanatics could not be trusted.
“The foreign fighters are actually by far the worst, and the most aggressive, most deranged of all the Islamic State fighters,” he said.