The police watchdog is investigating claims Scotland Yard detectives used hackers in India to illegally access private emails of political campaigners and journalists.
The allegations were made in a letter from a purported whistleblower who says hundreds of people were targeted without legal authority.
The anonymous individual, who says they previously worked for the intelligence unit, claimed the Met Police worked with Indian police, who in turn used hackers to obtain the passwords of email accounts belonging to campaigners and some journalists.
They also claim officers shredded documents to cover up the monitoring despite being ordered to preserve them.
Details of the letter were published by the Guardian and the BBC on Tuesday (21 March) after being passed to the Green Party peer Jenny Jones.
She passed the allegations to the Independent Police Complaints Commission (IPCC), which is now investigating.
A spokesman for the police watchdog said: "We have begun an independent investigation related to anonymous allegations concerning the accessing of personal data.
"We are still assessing the scope of the investigation and so we are not able to comment further."
The letter passed to Baroness Jones contains the email passwords of 10 people allegedly targeted to back up the writer's claims, the BBC reported.
Six of the 10 have already reportedly confirmed the passwords were correct. Four were said to have worked for Greenpeace, with one in a senior position.
The letter said: "For a number of years the unit had been illegally accessing the email accounts of activists. This has largely been accomplished because of the contact that one of the officers had developed with counterparts in India who in turn were using hackers to obtain email passwords."
Baroness Jones said: "This illegal hacking is one of the worst cases of state snooping that I've ever heard. The personal information within the letter is accurate and it could only have been obtained illegally.
"There is more than enough to justify a full scale criminal investigation. It is completely unacceptable that the police can stick their noses into the lives of innocent people without a shred of evidence that they are involved in terrorism or serious crime."
One of those allegedly targeted, former civil servant Colin Newman, is a volunteer for Greenpeace who has helped organise local protests.
He said he felt "angry" and "violated" when he found out he was on the list, saying he was not a "threat to national security" – one of the requirements for the home secretary to approve the interception of personal communications.
He told the BBC: "I trust the police. But some of my emails were very private – they include details of counselling. I have had sleepless nights."
It comes after a public inquiry into undercover policing was announced in March 2014 following controversy over the conduct of some officers.
Last month, the IPCC said it had uncovered evidence suggesting sensitive files were destroyed against orders just months after then-Home Secretary Theresa May had announced the inquiry.
The letter by the purported whistleblower claims the shredding had been happening "for some time and on a far greater scale than the IPCC seems to be aware of".
In a statement, a spokesman for Scotland Yard said: "The Independent Police Complaints Commission made the Metropolitan Police Service aware of anonymous allegations concerning the accessing of personal data, and requested the matters were referred to them by the MPS. This was done. The MPS is now aware that the IPCC are carrying out an independent investigation."