The private sector is being asked to help fight cyber terrorism and other state-sponsored attacks by submitting traffic data to GCHQ.
The authorities last year admitted that the UK is coming under serious and repeated cyber attacks on its core infrastructure, with potential targets including the power grid and emergency services.
Now the Government is putting pressure on companies to feed relevant traffic data to security experts at GCHQ in Cheltenham, where the information would be filtered for suspicious activity, according to the Telegraph.
Under the proposals, Security Minister Baroness Pauline Neville-Jones said an expanded national cyber security hub at Cheltenham would analyse network traffic from communications, power and transport providers looking for evidence of intruders.
GCHQ tools would be embedded in private networks and firms would link their own systems with those at the cyber security hub in Cheltenham.
"What we need is greater situational awareness," the Telegraph quoted Neville-Jones as saying, while she denied that the system would infringe personal privacy.
"What this partnership will not do is start breaking boundaries that we have around privacy and personal data," she said.
The Government has pledged 650 million to fund cyber security between now and 2015, with most of the money expected to be allocated to GCHQ.
Perhaps the most important network to monitor to detect threats to the UK is that of BT and, according to the Telegraph, the company is likely to comply with the Government's requests.
"We already manage security solutions across the UK's critical national infrastructure and we will be collaborating with the Government to share our expertise in protecting the UK against all cyber threats," the company told the paper.
