SPIES WILL TAP INTO ALL EMAILS AND CALLS

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Shadow Home Secretary Dominic Grieve said the proposal marked “a substantial shift in the powers of the state to obtain information on individuals”. And after a series of embarrassing security blunders including the loss of child benefit records for every family in the country, he questioned Whitehall’s competence to keep such data.

He said: “Given the Government’s poor record on protecting data and seeing how significant an increase in power this would be, we need to have a national debate and the Government would have to justify its need.”

The plan for the biggest surveillance system in British history is being spearheaded by GCHQ director Sir David Pepper.

It is currently classified as top secret and is being developed under the title: Interception Modernisation Programme.

The aim is to set up a “live tap” on every electronic communication in the country. At present, security service MI5 carries out limited monitoring of email exchanges and internet use.

Ministers have been told that the latest computer technology lays the grounds of a massive expansion of monitoring.

The database is likely to be centred at GCHQ’s famous “doughnut”-shaped spy centre in Cheltenham, Gloucestershire.

Further details will be released when the Government’s legislative programme is announced in the Queen’s Speech in December.

The plan is even more ambitious than the Identity Cards scheme being gradually introduced by the Government at a cost of £5billion. While a final decision has yet to be taken, ministers are understood to have agreed to the move “in principle”.

Supporters of the scheme claim it will help combat terrorism, computer fraud and internet-based paedophile rings.

Yet critics point out the amount of information stored would be vast. Last year 57 billion text messages were sent in Britain, the equivalent of 1,800 every second. Around three billion emails are sent every day, equal to 35,000 every second.

Michael Parker of No2ID said: “This database could have no practical use at all. It would be so big, it would be impossible to find anything useful.”

Home Office insiders confirmed the plan was being discussed, although they disputed the reported £12billion price tag.

A Home Office spokeswoman said police and intelligence agencies can already get information on phone calls from telephone companies. She said: “Develop-ments in technology mean that this capacity needs to be updated. Ministers and officials are considering how best to do this.”

But the plan risks provoking a clash between ministers and Information Commissioner Richard Thomas, the Whitehall watchdog on data and privacy issues. A spokesman said: “The commissioner warned that it is likely that such a scheme would be a step too far for the British way of life. Proposals that threaten such intrusion into people’s lives must be properly debated.”

A poll by data security firm GB Group last night found that only the gambling industry was trusted less by the general public than the Government to look after private records.