The British government wants ISPs and phone providers to keep records of everyone’s phone calls and online activity for up to a year.
Broadband and phone companies will have to log everything you do, except recording the content of emails, phone calls and social conversations.
Government agencies will be able to look at where you’ve been and who you contact - online and in the real world via mobile devices.
Civil liberties groups and internet providers said the bill would be ineffective against sophisticated criminals and turn ISPs into spies on their customers.
The draft Communications Data Bill, published yesterday, will restrict access to the police, intelligence services, Inland Revenue and Borders Agency.
Theresa May, the Home Secretary, said: “Communications technologies and services are changing fast. More communications are taking place on the internet using a wider range of services.
“As criminals make increasing use of internet based communications, we need to ensure that the police and intelligence agencies continue to have the tools they need to do the job we ask of them: investigating crime and terrorism, protecting the vulnerable and bringing criminals to justice.”
The Bill will be scrutinised by the Joint Committee of both Houses and the Intelligence and Security Committee before it begins its journey through Parliament, including the Information Commissioner’s Office.
One of the main sticking points is likely to ensuring there’s independent oversight, reporting and control over how the powers are used.
The bill is likely to face a rough ride from both communications providers and civil liberty groups, with ISPA - the Internet Service Providers’ Association - concerned about the role its members will have to play.
A spokesman said: “Ispa has concerns about the new powers to require network operators to capture and retain third party communications data.
"These concerns include the scope and proportionality, privacy and data protection implications and the technical feasibility.
"Whilst we appreciate that technological developments mean that government is looking again at its communications data capabilities, it is important that powers are clear and contain sufficient safeguards."
The Open Rights Group and Big Brother Watch both criticised the scope of the bill and claimed it’s unlikely to be effective against criminals using tools which can easily disguise communications traffic and make internet users anonymous.
Big Brother Watch has produced an extensive briefing which highlights contradictions with Coalition policy, potential failings in the bill and alternative but less sweeping powers for law enforcement.
Nick Pickles, of Big Brother Watch, said: “This policy goes against the Coalition Agreement, against Conservative pre-election policy and is fundamentally an illiberal, intrusive boondoggle that will do little to improve national security and do everything to turn us into a nation of suspects.”
Jim Killock, director of the Open Rights Group, said: “This is all about giving the police unsupervised access to data. It is shocking for a government that opposed Labour's plans on this to propose virtually the same thing.
"It will cost billions of pounds and will end up only catching the stupid or the innocent. Terrorists will circumvent it.”