Ministers are considering spending up to £12 billion on a database to monitor and store the internet browsing habits, e-mail and telephone records of everyone in Britain.
GCHQ, the government’s eavesdropping center, has already been given up to £1 billion to finance the first stage of the project.
Hundreds of clandestine probes will be installed to monitor customers live on two of the country’s biggest internet and mobile phone providers – thought to be BT and Vodafone. BT has nearly 5m internet customers.
Ministers are braced for a backlash similar to the one caused by their ID cards program. Dominic Grieve, the shadow home secretary, said: “Any suggestion of the government using existing powers to intercept communications data without public discussion is going to sound extremely sinister.”
MI5 currently conducts limited e-mail and website intercepts which are approved under specific warrants by the home secretary.
Further details of the new plan will be unveiled next month in the Queen’s speech.
The Home Office stressed no formal decision had been taken but sources said officials had made clear that ministers had agreed “in principle” to the program.
Officials claim live monitoring is necessary to fight terrorism and crime. However, critics question whether such a vast system can be kept secure. A total of 57 billion text messages were sent in the UK last year – 1,800 every second.