MPLS has been enhanced with the capability to precisely engineer traffic tunnels to avoid congestion and utilize all available bandwidth in an efficient manner. . The distributed fashion of setting up the labels and formation of data tunnels for the assigned FEC (Forwarding equivalence class) is a highly sophisticated mechanism, involving great dexterity on the part of Label switched Routers. This paper provides an extensive resource, serving the motivation for loop detection in MPLS. This proposal is in conjunction with colored thread algorithm [3], and addresses the issues of efficiency in both time and memory usage in setting up the Label switched paths (LSPs). The approach taken is to use the global variables, instead of IP addresses. The scheme is a loop prevention scheme, thus, ensuring loop detection and loop mitigation. Furthermore, a method of assigning the labels, while rewinding the thread has been explained, which could substantially reduce the LSP set up time and add to the efficient thread mechanism.