Labour is to call for much tougher oversight and scrutiny of the intelligence and security services to restore public confidence in their work and operations after the revelations about the US internet snooping programme, Prism.

The shadow home secretary, Yvette Cooper, will also call for much tougher independent oversight of the use of undercover police officers following the Guardian's disclosure of covert surveillance operations targeting Stephen Lawrence's family and the infiltration of protest groups.

Cooper says the scrutiny role of the intelligence and security committee (ISC), made up of senior politicians, and the oversight role of the intelligence and surveillance commissioners need to be strengthened.

Too much of the current oversight of intelligence agencies including MI5 and MI6 is unsatisfactory, paper-based and fails to provide any assurance to parliament and the public that there will be a rigorous investigation when things go wrong, Cooper will say in a major speech to the Demos thinktank on the balance between liberty and security on Monday.

She will say that the ISC is carrying out important inquiries into the Prism allegations and into the actions of the intelligence agencies in relation to the suspects in the Woolwich killing of Drummer Lee Rigby.

But the ISC's role needs to be strengthened further and there must be a more fundamental review of the commissioners oversight regime, Cooper will argue.

"Too often in the past we have been trapped into appearing to have to make a simple choice between liberty and security, or between rights and responsibilities," she will say.

"A One Nation Labour approach needs to value both liberty and security and demonstrate the strong interdependence between them. People can't exercise their freedoms unless they feel safe. Yet security measures to protect democracy are counterproductive if they undermine the democratic freedoms they were supposed to safeguard."

The shadow home secretary wants to see a single commissioner, rather than three watchdogs separately covering intercept, intelligence, and surveillance operations.

"As a member of the intelligence and security committee between 1997 and 1999, I have long been impressed by the dedication and work done by the intelligence services to keep us safe," says the shadow home secretary she will say. "But I have also long believed in a stronger system of oversight to hold them to account and justify in a democracy the secrecy they need to preserve."

Cooper will outline four principles that will guide Labour's future approach to security policy:

• An approach based on values and evidence, not just opposition for the sake of it.

• Liberty and security both matter.

• Ensure powers and measures are proportionate and justified by the evidence.

• There must be proper checks and balances in place.

Cooper says she has been "appalled" by the serious allegations involving the Metropolitan police's special demonstration squad, recently disclosed by a Guardian investigation.

She says that while Labour will maintain the use of undercover policing, it must be proportionate and operate under checks and balances.

"For officers to develop long-term relationships and have children as part of authorised covert operations is an awful abuse. And it is extremely important that Operation Herne gets to the truth," Cooper will say, in a reference to the official investigation into the allegations.

"The home secretary has rightly tightened requirements on undercover policing but she needs to go further. Undercover policing is an extremely important tool – be it identifying drug networks, building evidence on organised crime, or disrupting child grooming online. But there must be proper checks and balances in place."

"That is why much stronger, independent processes are needed, especially for authorising long-term covert operations. And proper independent scrutiny of those long-term operations is needed too, not just paper based checks."

The home secretary, Theresa May, last month outlined plans to tighten up the regulation of undercover operations by both the police and the security services, requiring pre-authorisation by the surveillance commissioners and sign-off at chief constable rather than superintendent level.

But Cooper says the government needs to go further, with independent pre-authorisation for long-term operations and a requirement for independent renewal if long-term operations are to continue for periods over a year. Spot inspections by a new police standards authority could look at the conduct of officers and the proportionality of operations.

Labour has already promised to replace the Independent Police Complaints Commission with a more robust standards authority with new powers to compel witnesses, launch its own investigations, hold public hearings and impose sanctions.

Police roles under fire

Damian Green, the policing minister, will order chiefs of all 43 police forces in England and Wales to see if they have misused undercover operations. He will say on Monday that he has been shocked by the "hugely damaging disclosures" in the Guardian about police undercover activities. Green is expected to say: "the allegations surrounding the Lawrence inquiry have been particularly shocking. They are the subject of independent investigation already and the home secretary has asked all forces to examine their archives to ensure nothing is hidden there.

"This has been a time of bad headlines for the police. They are largely historic, but still hugely damaging."

He will say the inquiries "may discover some very unpalatable truths, but it is better to discover them now than leave them hidden". Patrick Wintour