The security services are to receive a licence for hacking into the phones and laptops of a “major town” under the snooper’s charter legislation, which reaches the House of Lords next week.

The broad nature of the hacking powers to be handed to GCHQ are disclosed in an obscure case study in a background Home Office document setting out the operational case for their use.

This shows that all the phones and laptops in a “major town” could be hacked into, as long as the town were overseas and the action were necessary for national security purposes. The example used in the case study is identifying the phones and laptops being used by a terrorist group planning an attack on Western tourists in a major town.

The home secretary, Theresa May, has asked the official terror law watchdog, David Anderson QC, to conduct a speedy review this summer of whether such “bulk powers” are needed by the security services, and whether the information cannot be gained by less intrusive means.

The disclosure comes as the Liberal Democrats, who have 108 peers, say they intend to mount a strong challenge to the powers contained in the investigatory powers bill – as the snooper’s charter is officially known – when it reaches the House of Lords on Monday.

The Lib Dems say there is a clear need for legislation after the Snowden revelations of mass harvesting of confidential personal digital data by GCHQ and the US National Security Agency, but that the “snooper’s charter” includes powers that are disproportionate and misguided. The Lib Dems intend to “tear out the worst elements of the bill”.

The Lib Dem spokesman on the bill is Brian Paddick, a former deputy assistant commissioner of the Metropolitan police. He said these “worst elements” included the introduction of internet connection records – which track 12 months of web use. The Lib Dems also want to see the replacement of the home secretary’s powers to sign-off the most intrusive surveillance warrants by judicial authorisation.

He said the Lib Dems would also be pressing for further safeguards to protect confidential journalist and legal sources from disclosure through police access to communications or metadata.

Lord Paddick told the Guardian the bill allowed the state to target or harvest information about completely innocent members of the public. “The reason why it is called the ‘snooper’s charter’ is because it includes powers to store everyone’s web browsing history for 12 months. Despite renaming it as ‘internet connection records’, that is exactly what it requires communications service providers to do.

“The police and security services can authorise themselves to access anyone’s web history on the basis that they are suspected of something or that an allegation has been made against them,” said Paddick.

The Lib Dem briefing for the Lords stage of the bill says the government has underplayed the significance of internet connection records, trying to paint them as the equivalent of phone records. “It is clear that your web history reveals far more and would be akin to having a CCTV camera installed in your bedroom or a police officer following your every move,” the briefing says.



Paddick said that MI6 and MI5 say these records are of limited value to them as they already access similar information by other means, so there was no real national security case for their introduction. He said the Lib Dems would be pressing for a compromise whereby the police would only gain access to the records through the security services, rather than directly.

Labour voted in favour of the bill when it completed its Commons stages earlier this month, but the party is expected to ensure that further amendments are delivered during the Lords stages of the bill, to secure stronger protection for lawyers and journalists promised by the government.

The second reading on Monday will be followed in a fortnight by the start of the committee stage. Consideration of the parts of the bill dealing with bulk powers will take place in September after Anderson has delivered his report. Key votes on the legislation are not expected until mid-October.

• This article was amended on 22 June 2016. An earlier version said the Lib Dem spokesman on the investigatory powers bill, Brian Paddick, said the worst elements of the bill included the replacement by judicial authorisation of the home secretary’s powers to sign off the most intrusive surveillance warrants. In fact he said the Lib Dems were pressing for judicial authorisation.