A giant database of every phone call and email sent in Britain is being considered by the Government.
Internet service providers and telephone companies would be forced to hand over records to the Home Office, which would keep them on a computer system.
All forms of electronic communication face being monitored, including social networking sites and text messages.
The database would also include details of how long individuals spend on the internet.
The government would retain the data for 12 months and security services and police could seek court permission to access it in the fight against terrorism.
The plans are being considered for inclusion in the draft Communications Bill to be published in November's Queen speech.
Last night, however, opponents reacted with horror, branding them disproportionate and an 'Orwellian step too far', not least because the Government has an appalling record at keeping data.
Among a string of glaring breaches, more than 3million drivers have been put at risk of identity fraud when the DVLA lost their personal details in the American state of Iowa.
Last November two data discs containing the personal details of 25million people, including bank details, date of birth and National Insurance number, were lost by HM Revenue and Customs.
Ministers are yet to see the new plans, which have been drawn up by Home Office officials.
But if the government presses ahead it is likely to face public opposition and challenges with the a system to store all the information.
Fifty seven billion text messages were sent in Britain last year and 17.5million people accessed the internet via a mobile device.
Industry sources have warned such a large single database would be at a greater risk of attack by hackers.
Last night data protection campaigners and politicians queued up to criticize the idea.
Assistant Information Commissioner Jonathan Bamford said: "We are not aware of any justification for the State to hold every UK citizen's phone and internet records.
"We have really doubts that such a measure can be justified, or is proportionate or desirable.
"We have warned before that we are sleepwalking into a surveillance society ... the more data that is collected and stored, the bigger the problem when that data is lost, traded or stolen."
Shadow Home Secretary David Davis said: "Given ministers' appalling record at maintaining the integrity of databases holding people's sensitive data, this could be more of a threat to our security, than a support."
Britain is already one of the most watched nations on the planet.
Nearly 800 public bodies have been given powers to 'snoop' on our phone records or private correspondence to catch 'criminals' like fly-tippers.
Last month it emerged Poole council in Dorset was using powers designed for preventing terrorism to spy on a family to check they lived in the right catchment area.
It later owned up to using the same surveillance powers to snoop on fishermen.
Britain also has 20 per cent of the world's CCTV cameras - but just 1 per cent of its population.
Liberal Democrat home affairs spokesman Chris Huhne said the database was "an Orwellian step too far".
"Ministers have taken leave of their senses if they think that this proposal is compatible with a free country and a free people.
"Given the appalling track record of data loss, this state is simply not to be trusted with such private information."
The plans are an attempt to implement an EU directive developed after the July 7 bombings to make electronic record keeping uniform.
Telecoms firms have since last October had to keep records of phone calls and text messages for 12 months.
That requirement could now be extended to all forms of electronic communications.
A Home Office spokesman said retaining communications information was essential for protecting national security.
He also emphasised powers to hold information were subject to strict safeguards.
He said: "Communications data - the who, how, when and where of a communication but not the what (content) of the communication - is a crucial tool for protecting national security, preventing and detecting crime and protecting the public."