He said new forests would slow flooding by trapping water with their roots.
The idea of "rewilding" the uplands is catching on fast as parts of Britain face repeated flooding, with more rainfall on the way.
Environment Secretary Owen Paterson said he would seriously consider innovative solutions like rewilding.
The government has been criticised for being slow to capitalise on the benefits of capturing rain where it falls.
Lord Rooker, a Labour peer, said too much emphasis had been attached to the look of the countryside rather than practical considerations like trapping water.
"We pay the farmers to grub up the trees and hedges; we pay them to plant the hills with pretty grass and sheep to maintain the chocolate box image, and then wonder why we've got floods," he said.
The idea of reintroducing forests into catchments has been strongly supported by several leading scientists.
The government is sponsoring a handful of catchment trials to assess the potential of the upstream areas to catch water and send it slowly downhill.
A research paper for the Environment Agency shows that some of the schemes, like partly damming streams with felled trees to cause local flooding, are highly unpredictable when employed on their own.
If they divert rainfall on to surrounding fields that can actually make flooding downstream worse if the water then flows off the fields, bypassing bends in the river.
But the study, which is not yet peer-reviewed, suggests that reintroducing flood forests to upland areas can be highly effective - and potentially much cheaper than conventional flood defences.
The author, Simon Dixon, said: "Complex forested floodplains dramatically slow water moving over them as they have an irregular surface covered by tree roots, upright tree trunks and dead wood."
He explains the process this way: "As a simple analogy during a flood many 'packets' of water are delivered to the main trunk river from all its tributaries.
"If the delivery of a single large 'packet' of water can be significantly delayed it will then arrive at the main river after the peak of the flood, and thus the main flood peak height has less 'packets' of water in it and is lower."
The best results come, he says, when rivers are partly dammed and a forest is allowed to grow on the floodplain. "This shows substantial and predictable responses in downstream flood height," he said.
This is exactly what would have happened if farmers had not been encouraged by government to maximise food production by felling forests to graze sheep on the uplands.
Lord Rooker got the idea of reintroducing forests from an article by the green journalist George Monbiot, who complained that farmers are subsidised to keep sheep even though the grazing animals actually make flooding worse by compacting the earth.
"Instead of a steady flow sustained around the year by trees in the hills, by sensitive farming methods, by rivers which are allowed to find their own course and their own level, to filter and hold back their waters through bends and braiding and obstructions, we get a cycle of flood and drought. We get filthy water and empty aquifers and huge insurance premiums and ruined carpets. And all of it at public expense," Mr Monbiot wrote earlier this month.
The idea of catching water upstream is strongly supported by the water and environment professional body, the Chartered Institution of Water and Environmental Management (CIWEM).
Its spokesman Katherine Pygott has previously told BBC News: "Flooding is getting worse with changing weather patterns, but these schemes are taking a very long time and a lot of energy.
"Projects working with nature to reduce flood risk are needed right across the country - but it is complicated, with many different organisations involved, and it will need political leadership from the highest level to make it happen. So far we haven't seen that leadership."
Environment Secretary Owen Paterson told me he would give serious consideration to innovative solutions to flooding, like rewilding.
The government could theoretically encourage farmers to rewild key parts of their catchments using grants under the Common Agricultural Policy, but CIWEM say that at the moment it is much easier for farmers to get grants for wildlife protection than flood protection.
Mr Paterson had hoped to divert more cash into a fund that could be used for these sort of measures but was overruled by the prime minister after a campaign by farmers demanding to keep the maximum amount of their grants into direct payments for farming - in effect, for owning land.
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Britain should turn swathes of its upland pastures into woodland to help prevent flooding, according to a former environment minister, Lord Rooker.