Politicians and campaign groups have reacted angrily to the government's plans to monitor the calls, emails and texts of everyone in the UK.
Under new legislation expected to be annoucned in next month's Queen's speech, internet companies will be required to allow GCHQ - the government's electronic "listening" agency - to examine any phone call made, text message and email sent and website accessed in "real time" without a warrant.
In a statement, the Home Office claimed it was "vital" that police and security services are able to obtain communications data in this way in order to combat serious crime and terrorism and stressed a warrant still would be needed to access the content of the communications they were monitoring.
However, the new law would allow authorities to trace who people were in contact with, how often they contacted them and for how long.
A previous attempt to introduce a similar law dubbed "the Big Brother bill was abandoned in 2006 by the Labour government following fierce criticism from the Conservative Party, Liberal Democrats and civil liberty groups.
The latest move has been condemned by Conservative backbencher and former shadow home secretary David Davis, who said it would make it easier for the government to eavesdrop on the public.
"What this is talking about doing is not focusing on terrorists or criminals, it's absolutely everybody's emails, phone calls, web access," Davis told the BBC.
"All that's got to be recorded for two years and the government will be able to get at it with no by your leave from anybody."
Nick Pickles, director of the Big Brother Watch campaign group, described the move as "an unprecedented step that will see Britain adopt the same kind of surveillance seen in China and Iran."
Pickles added: "This is an absolute attack on privacy online and it is far from clear this will actually improve public safety, while adding significant costs to internet businesses.
"If this was such a serious security issue why has the Home Office not ensured these powers were in place before the Olympics?"
Shami Chakrabarti, director of campaign group Liberty, warned that it would undermine the coalition's commitment to human rights if it went ahead with the plan.
"There is an element of whoever you vote for the empire strikes back," she said. "This is more ambitious than anything that has been done before. The coalition bound itself together in the language of civil liberties. Do they still mean it?"
Jim Killock, Executive Director of the Open Rights Group said: "Blanket collection, without suspicion, or powers to compel companies to hand over data on the say-so of a police officer would be very wrong.
"The saga of complicity between senior police officers and Murdoch's journalists should tell us how vulnerable people's privacy can be. The government should stand by the commitments both parties made before the election to protect our privacy."