New guidelines compiled by the Army Medical Directorate Environmental Health Team say the instrument which has traditionally led Scots regiments into battle can cause hearing damage if played outside for more than 24 minutes a day.
The document also insists that musicians playing inside should only do so for 15 minutes, and just six minutes in echo-prone toilets with tiled walls - an area commonly used by pipers for practising.
The guidelines, which also apply to drummers, were carried out because the military fears being sued by soldiers who claim their hearing has been damaged by too much pipe playing.
But last night, pipers busking in Edinburgh's Princes Street said the new measures were "ridiculous". "I've been playing the instrument for 30 years. I played it on my own and with the Gordon Highlanders, and I haven't had one single problem," said Michael Baumeyster who lives in Edinburgh.
"The underlying noise from buses and fire engines on Princes Street is far worse than that of bagpipes. I play the chanter every day for at least two hours. This is my livelihood and I wouldn't do anything else."
He added: "It just shows the nanny state we live in. Scots squaddies have lost all the regimental distinctions. The MoD has stripped them of their regalia, pedigree, uniforms and now they want to limit them to play the pipes."
Piping experts and military veterans also condemned the rules. General Sir Michael Gow, formerly of the Scots Guards, said: "I have never heard such a silly idea in my life."
Roddy MacLeod, principal of the National Piping Centre in Glasgow, said the rules would prevent aspiring pipers mastering the instrument. He said learner musicians needed to practise at least an hour a day.
Army experts tested the decibel levels of playing bagpipes in a variety of locations to the tune Kilworth Hills.
The MoD already makes special payments to personnel whose hearing has been affected by working on rifle ranges.
The tests found that the bagpipe peaks at 111 decibels outdoors - slightly louder than a pneumatic drill. But when the pipes are played indoors they peak at a 116 dB, about as loud as a chainsaw.
Very loud rock music can reach 150 dB, while a jet airliner taking off peaks at 140 dB.
A spokeswoman for the army in Scotland said the new rules showed it was serious about protecting soldiers. She added: "Some might say it's too PC, but it is simply a prudent precaution."