A former director of public prosecutions has launched a strident attack on the head of MI5 for using "foolish self-serving rhetoric" to resist legitimate calls for Britain's intelligence agencies to face more scrutiny in the face of revelations about their surveillance capabilities.

Lord Macdonald QC said it was wrong for Andrew Parker and other senior figures in the intelligence community to argue that greater scrutiny and more transparency would affect the ability of MI5, GCHQ and MI6 to do their work.

Arguing that the existing legislation governing the services was "anti-modern", the peer, now a defence lawyer, said that an urgent review of the oversight regime was needed to prevent an "an increasing subservience of democracy to the unaccountability of security power".

Writing in the Guardian, Macdonald was responding to Parker's claim last week that stories about GCHQ's mass surveillance programmes had been "a gift to terrorists", and that there was no need for more rigorous oversight.

The MI5's chief's views were shared by Sir Malcolm Rifkind, the chair of the intelligence services committee, which is supposed to provide parliamentary scutiny of the agencies.

Macdonald said Rifkind, who was in charge of GCHQ when he was foreign secretary, was "badly compromised" and appeared too close to the organisations he was supposed to be holding to acccount.

The laywer added that the disclosures from the whistleblower Edward Snowden had revealed "the sickly character" of the UK's current scrutiny regime, which needed an overhaul.

In his sharpest remarks, Macdonald said: "Worst of all has been the argument, heavily deployed in recent days, including by Sir Malcolm himself, that any more daylight than we currently enjoy simply assists the nation's enemies.

"Andrew Parker, the new director general of MI5, should be slower to employ this foolish, self-serving rhetoric, which naively begs a perfectly legitimate question: how should we ensure that those privileged to be granted special powers to intrude into everything that is private, serve a real public interest, rather than the dangerously false god of securitisation for its own sake?"

Macdonald is the latest heavyweight figure to enter the debate about surveillance. His comments come at the start of a week in which the deputy prime minister, Nick Clegg, will begin to assess what might be done to shine more light on the work of the agencies.

Macdonald praised the way technological innovations had enhanced human knowledge and engagement, but warned this had transformed the way spies go about their business.

"It has also meant that the spooks, who once sat in cubicles steaming open the glued-down flaps of a few dozen suspect envelopes, now have more fertile plains to furrow and the marvellous means to do it. Now they can steam open everything.

"This blinding transformation has careered into a world where current legislation is so anti-modern that it struggles to distinguish between miniature bugs screwed into telephone ear pieces, and remote tapping from old-world, long-gone GPO exchanges," the peer said.

He added: "So it seems very obvious that when it comes to surveillance and techniques of domestic spying, the law should be the master of technology. Anything else risks a spiralling out of control, an increasing subservience of democracy to the unaccountability of security power. This means, at the very least, that as technologies develop, parliament should consider afresh the rules that govern their use by state agencies."

Macdonald said nobody seemed to know which laws permitted spies "access to everything" and that the ISC should never again "be led by someone whom the public might perceive as having an axe to grind or an interest to defend. Not the least of the inadequacies exposed by fallout from the Snowden revelations has been the sickly character of parliamentary oversight of the security agencies, even after recent reforms."

He criticised the intelligence and security committee for conducting an apparently cursory inquiry, saying that its decision to go "into brief private session, only to emerge blinking into the daylight with protestations of apparent fealty towards the security services is a very poor substitute for grown-up scrutiny.

"Co-option is not a uniquely British problem, but it surely is underlined when, amazingly, the ISC is chaired by Sir Malcolm Rifkind – who was once himself responsible for MI6 as foreign secretary."

Macdonald made clear he has no truck with those who believe the state could do without intelligence agencies, and he said transparency had to have its limits. He described the "Julian Assange philosophy" of full disclosure of state secrets and documents as "a childish stamp of the feet".

But he added that the trust the public had in the agencies was in danger of being eroded unless the weaknesses in the laws and in the scrutiny regimes were addressed, writing: "Nothing could be more damaging to this public support than a notion that, in pursuing a broadening vocation, the spies somehow find themselves squinting through lenses not just at the villains, but at the rest of us too."

Files leaked by Snowden show the British eavesdropping centre, GCHQ, and its US counterpart, the National Security Agency, have developed capabilities to undertake mass surveillance of the web and mobile phone networks. This is done by trawling the servers of internet companies and collecting raw data from the undersea cables that carry web traffic.

Two of the programmes, Prism and Tempora, can sweep up vast amounts of private data, which is shared between the two countries.

The Guardian recently revealed how GCHQ and the NSA have also successfully cracked much of the online encryption relied upon by hundreds of millions of businesses and individuals to protect their privacy.

The arguments over Snowden's leaks reached a new peak last week with Parker's speech – the first he has made since he took over MI5 six months ago.

Sir David Omand, the former head of GCHQ, told the Guardian a fortnight ago its stories about UK surveillance had done enormous damage to national security.

However, the business secretary, Vince Cable, said last Friday the Guardian had done a great public service by revealing broad details about the extent of the UK's surveillance programmes.

Over the last fortnight a former member of parliament's intelligence and security committee, Lord King, a former director of GCHQ, and a former director general of MI5, Dame Stella Rimington, have questioned whether the agencies need to be more transparent and accept more rigorous scrutiny of their work.