The security minister has confirmed officials are considering installing technology that could enable on-demand wiretapping of all communications passing over the internet by the intelligence services and law enforcement.

Lord West told Parliament on Monday that civil servants working on the Interception Modernisation Programme (IMP) were considering how Deep Packet Inspection (DPI) equipment "might support the lawful interception of communications and separately the lawful acquisition of communications data".

It's the first time the government has publicly acknowledged its interest in DPI equipment. A delayed Home Office consultation on IMP is due to be launched "shortly", West said.

The Programme as envisaged by GCHQ and MI6, according to sources, has two aims.

First, spy chiefs want to create a massive central repository of communications traffic data. Such data contains the powerful details of who contacts whom, how, when and where. Most major ISPs and telecoms firms already retain much of this data, but some do not, and many email, VoIP, instant messenging and social networking services retain little.

This in turn would facilitate the second aim of the system, the interception of the content of internet communications. As now, this would require a warrant under the Regulation of Investigatory Powers Act (RIPA), but each wiretap would be much easier to implement.

West's comments confirm our sources' information that officials are considering a network of DPI probes inside the UK internet and telecoms infrastructure that could fulfil each ambition. The equipment can monitor everything in each data packet passing its location in the network, allowing both "the lawful acquisition of communications data" and the "the lawful interception of communications".

The hardware would be much the same as that Phorm plans to use in its ISP-level targeted advertising system, albeit on a far grander scale. Leaked estimates have put the cost of a ubiquitous DPI network and central database at £12bn. DPI would account for the lion's share of that figure. The two controversial systems have both arisen out of rapid advancements in chip and network technology that have made monitoring IP networks at line speed feasible, however.

That development of surveillance power in the last decade is illustrated by a letter to the editor of The Guardian by then-National Criminal Intelligence Service Director General John Abbott, in 2000.

He wrote: "Conspiracy theorists must not be allowed to get away with the ridiculous notion that law enforcement would or even could monitor all emails. The intelligence agencies have neither the inclination nor the resources, nor the legal ability to monitor the massive amounts of electronic communications that flow through the UK every day.

"It does not happen with letters or telephones and it will not with emails."

Nine years later, the DPI equipment being considered by the government would allow exactly that.

West did not address the thrust of Liberal Democrat peer Baroness Miller's question yesterday. She asked whether DPI would be used to peer into communications to ascertain identity where it could not be gleaned from the traffic data.

Security experts including the University of Cambridge's Dr Richard Clayton have pointed out that in such cuircumstances, where DPI technology is installed, the line between communications traffic data and the content of the communication could become blurred. ®