Government ministers are considering plans to spend an estimated 12 billion on a database to monitor and store Briton's e-mails, texts and calls.
The Government's Communication Headquarters (GCHQ) programme has already received 1bn in funding to begin the project. To monitor customers, hundreds of probes will be installed on networks.
The MI5 currently has a similar system, but can only proceed with surveillance if it has been approved by the home secretary.
The Home office said: "Ministers are considering what legislation is needed to ensure safeguards are in place to protect the privacy of the public."
IT PRO reported earlier this year on the possibility of the database, with the main concern among citizens being privacy.
Last year over 57 billion text messages were sent, along with three billion e-mails each day.
Michael Parker, of campaign group NO2ID, said the project would be a waste of money and called for a national debate on the matter.
"It just shows again this government's desire to turn itself into a stalker state," he said.
More details are expected to be released in the Queen's speech next month.
