The Internet Service Providers Association (ISPA) has raised concerns about David Blunkett's plans for anti-terrorist data monitoring.
The Anti-Terrorism Crime and Security (ATCS) Bill was introduced as emergency legislation following last year's terrorist attacks in the US.
Part 11 of the Bill - Retention of Communications Data - allows the Secretary of State for the Home Office to create a voluntary Code of Practice requiring communication service providers, including ISPs, to retain billing data for use by law enforcement agencies in terrorist investigations.
At present, the voluntary Code of Practice requests that ISPs hold information such as users' names and addresses, plus details of emails and websites visited by each customer, for an indefinite period.
But the ATCS Bill raises a potential conflict with the Data Protection Act, which states that such data should only be retained for as long as it is required for billing purposes.
A spokesman for ISPA said: "We haven't refused to agree to the government's plans, but we've not been given clarification on a number of points."
ISPA wants better evidence that the enquiries made by law enforcement agencies are only used for criminal investigations. The organisation also requires clarification on how the costs of storing data will be met.
As a next step, Blunkett could impose a mandatory code for data retention, although ISPA is still hoping to establish a suitable voluntary process.
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