Alan Travis

Home affairs editor

Nick Clegg is preparing to distance the Liberal Democrats from Home Office legislation giving the security services and the police new powers to track everybody's mobile phone and internet use.

The Liberal Democrat leader met David Cameron earlier this week and made clear that his party's support for the legislation is conditional on addressing the concerns of a special scrutiny committee due to report next Tuesday.

The report from the cross-party committee on the draft communications data bill, or "snoopers' charter" as it is known, is expected to be highly critical and demand a substantial rewriting of the draft legisation at the very least.

The home secretary, Theresa May, has insisted that the £1.8bn programme is needed for the law enforcement authorities to keep track of organised criminals and terror suspects in an age of rapidly developing technology. But the parliamentary committee, chaired by the former Conservative Home Office minister, Lord Blencathra, is expected to voice concerns over lack of privacy safeguards, the potential cost, and the lack of clarity over the limits to the use that can be made of such confidential personal data.

The draft legislation requires online and telephone firms to store all the personal traffic data of every customer's web and mobile phone use and hand them over to the police and security services on request. They will not be required to retain the content of emails, texts or other web communication but some critics argue there is a very fine line between content and traffic data on social media.

It is likely the legislation will have to be substantially rewritten if it is to win Lib Dem backing that May needs to get the bill onto the statute book within the next 18 months. "Nick Clegg insisted on the pre-legislative scrutiny that it's currently getting, so we would take their views very seriously indeed," said a Lib Dem source.

Some Lib Dem backbenchers hope Clegg will use the report next week to kill the legislation. Lord Strasburger, a Lib Dem peer on the committee, has called it a "honeypot for casual hackers, blackmailers, criminals large and small from around the world, and foreign states".

Lib Dem home affairs spokesman, Julian Huppert, said in September that the party wouldn't allow the bill to go forward in its current form: "The major problem was with the clause which gives the home secretary virtually unbridled power to snoop on someone's internet activity."

May also faces criticism from the Tory libertarian right. Tory MP Dominic Raab has said he will not vote for the measure: "There are fundamental issues of necessity, principle, cost and viability that remain unanswered. I cannot see parliament backing the plans."

Labour has not yet said whether or not it will support the legislation. But the loss of Lib Dem support could make it very difficult for May. The bill is expected to run into serious trouble in the Lords and she will need a coalition majority to overturn them in the Commons if she is to steer it onto the statute book.