Internet companies would be instructed to install hardware to allow the Government Communications Headquarters (GCHQ) -- Britain s electronic "listening" agency" -- to go through "on demand" every text message and email sent, websites accessed and phone calls made "in real time, the broadsheet said.

The plans are expected to be unveiled next month.

The Home Office interior ministry said ministers were preparing to legislate "as soon as parliamentary time allows" but said the data to be monitored would not include content.

"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," a spokesman said.

"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.

"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."

An attempt to bring in similar measures was abandoned by the former Labour government in 2006 amid strong opposition.

However, ministers in the current Conservative-Liberal Democrat coalition government believe it is essential that the police and security services have access to such communications data in order to tackle terrorism and protect the public.

The plans would not allow GCHQ to access the content of communications without a warrant.

However, they would enable the agency to trace whom a group or individual had contacted, how often and for how long, the report said.