Exclusive The Home Office has created a new unit to oversee a massive increase in surveillance of the internet, The Register has learned, quashing suggestions the plans are on hold until after the election.

The new Communications Capabilities Directorate (CCD) has been created as a structure to implement the £2bn Interception Modernisation Programme (IMP), sources said.

The CCD is staffed by the same officials who have have been working on IMP since 2007, but it establishes the project on a more formal basis in the Home Office. It is not yet included on the Home Office's list of directorates.

The intelligence and law enforcement agencies have pushed hard for new laws to force communications providers to store details of who contacts whom, when, where and how via the internet.

However, following a consultation last year, when the Home Office's plans were heavily criticised by ISPs and mobile companies, it was widely assumed progress on IMP would slow or stop. The CCD has continued meeting with industry to try to allay concerns about the project's costs, effect on customer privacy and technical feasibility.

"The Home Office has long been working with communications service providers to take forward legislation providing for the retention of communications data," a Home Office spokesman said. "That is continuing."

"More recently, we have been considering how, in a changing communications environment, lawful acquisition of communications data and interception of communications can continue to save lives, to counter terrorism, to detect crime and prosecute offenders, and to protect the public."

Officials envisage communications providers will maintain giant databases of everything their customers do online, incluing email, social networking, web browsing and making VoIP calls. They want providers to process the mass of data to link it to individuals, to make it easier for authorities to access.

Access to communications data is currently governed by the Regulation of Investigatory Powers Act. Under European legslation ISPs are required to retain basic information about what their customers do online, but not to open their data packets to record who they contact on Facebook, for example.

The Home Office spokesman added: "This is a diverse range of activity now organised within a single Communications Capabilities Directorate with its focus on work under current legislation.

"The Directorate will continue to consider the challenges posed by new technologies, working closely with communications service providers and others to bring forward proposals that command public confidence and demonstrate an appropriate balance between privacy and security."

Work is also continuing at GCHQ in Cheltenham on its classified Mastering the Internet programme, which is developing systems and methods for extracting intelligence from the huge volumes of new surveillance data online services can generate. ®