Plans to fit all taxis operating in the city of Oxford with audio recording devices have been branded a “staggering invasion of privacy” prompting calls for the Information Commissioner’s Office (ICO) to investigate how widespread the use of microphones on public transport has become.

Taxi drivers in the university town have been told that they need to install the £460 devices by 2015 or face having their licenses revoked. The microphones, accompanied by CCTV cameras, will activate once the ignition in the car is turned on and will remain recording for 30 minutes after the engine is turned off.

The council says the recording equipment is necessary to protect drivers and passengers as well as deal with any disputes over fares. Recorded information would only be accessible to the police or council officials.

But privacy campaigners say the plans represent a significant “ramping up” of surveillance culture in Britain and may well be in breach of Government guidelines.

“This is a staggering invasion of privacy being done with no evidence, no consultation and a total disregard for civil liberties,” said Nick Pickles, director of Big Brother Watch. “To my knowledge this is the first time a council has brought in audio recording equipment like this in taxis.”

James Welch, legal director for Liberty added: "Local Authorities have fallen foul of public anger and the law in relation to CCTV before - we urge anybody concerned about the legal position to get in touch with Liberty"

Big Brother Watch has since complained to the ICO which confirmed last night that it was investigating the proposals.

Two Oxford bus companies, however, already use audio recording on some of their routes. The Oxford Bus Company confirmed that some of its newer CCTV cameras have their microphones turned one in the driver’s compartment whilst Stagecoach said it was trialling microphones on its “Oxford Tube” service to London.

Philip Kirk, the Managing Director of Oxford Bus Company said: “All our buses are fitted with CCTV and many of them also record sound at the entrance. In general we have found that CCTV works well to protect our passengers and our drivers.”

The exact extent of microphone use on public transport is not known. But one official involved in the sale of CCTV told the Independent: “It’s not unusual. Many of the newer devices have audio record options. Most of the time it is used to record conversations between, say, a bus driver and the passenger at the point of entry. It’s unusual for private conversations to be recorded.”

Other audio equipment that has been given the go-ahead in the past include panic buttons and noise sensors which only turn the microphones on in certain circumstances such as when someone is shouting or if a driver fears they are in danger.

London Transport, which operates a fleet of more than eight thousand buses in a city with considerably higher crime rates than Oxford, said it had no audio devices on its buses and no plans to bring them in.

The government’s guidelines on CCTV make it clear that audio recording can only be used in very limited circumstances.

“CCTV must not be used to record conversations between members of the public as this is highly intrusive and unlikely to be justified,” a spokesperson for the ICO said. “A system without this facility must be chosen if possible. If a system comes equipped with a sound recording facility then you should turn this off or disable it in some other way.”

The spokesman added that audio could only be used as a “proportionate and reasonable response to tackling and preventing crime and ensuring public safety”. Passengers should be told if their voices are being recorded.

The Oxford Bus Company confirmed last night that none of its CCTV signs currently alert passengers to the use of audio recording equipment on board their vehicles.

Big Brother Watch have questioned what, if any, public consultation was made by Oxford City Council’s licensing committee over the introduction of microphones into the city’s 600 plus taxis. Two statement papers available online made in March and October state that CCTV must be installed but April 2015 but there is no mention of audio.

A spokeswoman for the council defended the plans: “The Council has an overall responsibility to promote the safety of the travelling public. The law allows the Council to impose any conditions on hackney carriage and private hire licences that it considers reasonably necessary. The proposals for CCTV in vehicles have been promoted in consultation with the taxi trade and at each stage committee reports have been available to the public in advance of meetings.”

She added: “Signage will be placed on the outside of the vehicles to inform the public that CCTV and audio will be recording in the vehicle so they are aware before they step into the vehicle.”

Alan Woodward, secretary of The City of Oxford Licensed Taxi Cab Association, said sound recordings provided vital evidence for police and council staff.