Yes, you need to create a radius around your character. I wrote a small function for it ages ago which you can find here
. Anyway... you would query inside of the left mouse button actions inside of the mouse properties tab under game whether the cursor is inside of this radius & if so then add a "character stop". action part. I also suggest wrapping the execute a script action part inside of this if query "if current character is on current scene". This will prevent this action from being called whenever the active character is not on the currently displayed scene / menu.
P.S: you could technically modify the script so that the radius is adjusted automatically based on the current size of the character.