Internet firms have condemned the government’s “Big Brother” surveillance plans as an “unwarranted” intrusion into people’s privacy.

The companies, which ministers are relying on to implement the scheme, also say the government has misled the public about how far it plans to go in monitoring internet use.

The criticism, contained in a private submission to the Home Office, threatens to derail the £2 billion project, which ministers claim is essential to combat terrorism and crime.

Despite hostility from opposition MPs and civil liberties groups, government security officials want to be able to monitor every e-mail, phone call and website visit of people in the UK.

They point to the increasing use by criminals and terrorists of internet telephone calls, social networking sites such as Facebook and Twitter and online chatrooms to hide their communications. The government claims it wants simply to “maintain” its capability to fight serious crime and terrorism.

However, the submission — by the London Internet Exchange, which represents more than 330 firms including BT, Virgin and Carphone Warehouse — said: “We view the description of the government’s proposals as ‘maintaining’ the capability as disingenuous: the volume of data the government now proposes [we] should collect and retain will be unprecedented, as is the overall level of intrusion into the privacy of citizenry.

“This is a purely political description that serves only to win consent by hiding the extent of the proposed extension of powers for the state.”

The rebuke is the latest blow to the plans to allow police, the intelligence services and GCHQ, the government’s eavesdropping centre in Cheltenham, Gloucestershire, to monitor all web communications. Ministers have already been forced to drop plans for a central database holding records of all e-mails, phone calls and website visits.

In April Jacqui Smith, then the home secretary, tried to salvage the plans. She announced that £2 billion of public money would instead be spent helping companies retain the information for up to 12 months in separate databases. She asked the industry for its views.

Apart from accusing ministers and officials of hiding the truth from the public, the internet firms dismissed the plans as technically unworkable.

In a statement earlier this year, GCHQ denied that it planned to spy on every e-mail and website visit in the UK. The internet providers, however, made it clear they do not believe that denial.

“These new proposals suggest an intention to capture anything and everything, regardless of the communications [method] used. We have grave misgivings about the technical feasibility of such ambition,” they said.

“We are not aware of any existing equipment [an internet company] could purchase that would enable it to fulfil a legal obligation to acquire and retain such a wide range of data as it transits across their network ... in some common cases it would be impossible in principle to obtain the information sought.”

In some cases, they said, the data might not even exist on a firm’s network but on a foreign server.

The internet providers also complained that the new proposals might be illegal under European or human rights laws. They said the plans would involve the collection of data “which is unprecedented both in volume and the level of intrusion into personal privacy”.

The firms said: “We are not satisfied that the existing safeguards adequately protect the public, our members’ customers and end users, even with regard to the current regime let alone the far more intrusive proposals under discussion.”

They added that they feared for what would happen to their customers’ data once it was handed to the security services. Recent scandals, including the loss of the private bank accounts and home and addresses of 25m people registered for child benefit, have damaged the government’s reputation for dealing with such data.

“Given the government’s recent track record in failing to maintain the security of data collected from the general public, the public will require reassurance on this point,” said the submission.

Last night a Home Office spokesman said: “We know that this is a complex and sensitive subject, with a fine balance to be made between protecting public safety and civil liberties. This is why we launched a public consultation.

“We have had a number of responses that we are currently considering. We will be responding in due course.”

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