Web browsing habits, email conversations and phone calls will be monitored by the government under new legislation set to be unveiled in May.
The government is planning to announce the legislation in the Queen's Speech in May, with Home Office confirming it believes such steps are necessary to tackle criminality and terrorism.
"It is vital that police and security services are able to obtain communications data in certain circumstances to investigate serious crime and terrorism and to protect the public," the Home Office said in a statement.
"We need to take action to maintain the continued availability of communications data as technology changes. Communications data includes time, duration and dialling numbers of a phone call, or an email address."
But the government said the content of messages or conversations would not be recorded, only the contacts being made, claiming this fell within existing legal frameworks.
"It does not include the content of any phone call or email and it is not the intention of government to make changes to the existing legal basis for the interception of communications," the Home Office added.
The Home Office also confirmed the plans will be brought forward, "as soon as parliamentary time allows".
Online rights groups were up in arms over the plans, with the executive director of the Open Right's Group, Jim Killock, arguing the measures were far too extreme.
"The security services should be able to get a warrant to monitor genuine suspects, but 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," he said.
"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."
Nick Pickles, from Big Brother Watch, also condemned the proposals and the government's unwillingness to respond to the complaints being raised.
"The government has offered no justification for what is unprecedented intrusion into our lives, nor explained why promises made about civil liberties are being casually junked," he said.
"The silence from Home Office ministers has been deafening. It is remarkable that they wish to pry into everything we do online but seem intent on avoiding any public discussion."
Even leading Tory MPs have criticised the move, with David Davis telling the BBC the measures went far beyond what was acceptable in the name of law and order.
"Our freedom and privacy has been protected by using the courts by saying 'If you want to intercept, if you want to look at something, fine, if it is a terrorist or a criminal go and ask a magistrate and you'll get your approval'," he said.
"You shouldn't go beyond that in a decent, civilised society but that is what is being proposed."
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