EMMA ALBERICI, PRESENTER: The British Government is facing strong criticism from its own supporters over a decision to ask a spy agency to monitor all phone calls, texts, emails and online activity in the country.

The Home Office says it's vital that police and security services are able to obtain private communications to investigate serious crime and terrorism.

The move is just the latest in a long line of steps which mean Britain is now one of the most surveilled countries in the Western world.

From London, Europe correspondent Philip Williams reports.

PHILIP WILLIAMS, REPORTER: Like being on camera? Well London, in fact the whole of the UK, is the place for you. Thanks to the IRA bombing campaign, cities like London are saturated with surveillance cameras. You can smile for them day and night.

Before the Coalition came to power there were promises of a so-called Freedom Bill, discarding unnecessarily intrusive surveillance of all kinds. So it's surprising for some on the Government's own side there are now plans to allow the security agency GCHQ access to everyone's phone, email and social media records.

DAVID DAVIS, CONSERVATIVE MP: They don't need this law to protect us. This is an unnecessary extension of the ability of the state to snoop on ordinary innocent people in vast numbers and frankly they shouldn't have that power.

PHILIP WILLIAMS: Currently communications companies have to keep two years' records, which can be accessed if a magistrate allows it. Under the new law, every record of every conversation, email, etc, will be available.

TOM BRAKE, LIBERAL DEMOCRAT MP: Well, we need to be concerned that when unpacking information, that all they're capturing is the person who is making the call or the electronic communication, that they're not capturing the content.

Now I think we can do that, I think that can be guaranteed, but it may actually require some fundamental software changes to ensure that it happens.

PHILIP WILLIAMS: But according to the Government, it's a necessary update to the law to reflect an ever-changing media environment aimed at combating terrorism and serious crime. It's also a technical challenge that won't come cheaply.

ADRIAN MARS, TECHNOLOGY EXPERT: It's a difficult job to keep track of so many different forms of data. Each time we communicate with a company, we use different protocols, different means of sending that and that's constantly changing and must be kept up with.

PHILIP WILLIAMS: It's not the technical, but the cost to liberty and privacy that worries campaign group Big Brother Watch.

EMMA CARR, BIG BROTHER WATCH: The way it works is that if because of intelligence that they already have they're worried about prospective terrorist attacks, they can go to a magistrate and say, "Look, we want to look at the content of this information." They can get that within 24 hours and they can be looking at the content.

It just seems absurd for the need to look at everybody in the country's information just in case they might use a buzzword that might flag up something.

PHILIP WILLIAMS: Are you concerned that there's not really a lot of public reaction to this. There doesn't seem to be outrage about this.

EMMA CARR: Oh, I disagree. I think over the last 24 hours especially young people, they've taken to Facebook and Twitter and general social media, ironically, to say that this is just outrageous, you know.

They're organising a "Let's CC the Government into Every Email" day just so the Government can just see how much people communicate via email. I think especially the younger generations are just - they just think it's an absurd use of government time and money and they're just not willing to accept that.

PHILIP WILLIAMS: No doubt some of the spies working here at MI5 will welcome this change; it'll help their business. But there are more than a few people concerned that Big Brother is getting a little too nosey.

Philip Williams, Lateline.

EMMA ALBERICI: Joining us from our London studio is Europe correspondent Philip Williams.

Phil, it does seem extraordinary that they're going to these lengths in a country that's trying to shed 25 per cent of its government in terms of costs and time that's spent, in terms of getting rid of layers of bureaucracy.

PHILIP WILLIAMS: Yes, it's going to be, we're told, quite intensive in its labour and the cost and it's of course aimed at combating terrorism and serious crime.

That's what we're told, but of course the worry is not just the cost, it's the intrusiveness. And many of the libertarians saying, "Look - we're told this is just looking at the traffic, where the traffic's going, not actually what's in the emails," but of course, that's taking everything on trust and there isn't a lot of that, particularly amongst some of the groups that we've been speaking to who believe that the government, this is really just one more intrusive element to get into people's lives where they shouldn't be.

EMMA ALBERICI: And what's the reaction from the Coalition partners, the Liberal Democrats, been? I mean, we saw in your package there that one Lib' Dem' thought it might work out, that this might be able to be enacted without being too burdensome for the Government, but what has generally been the feeling?

PHILIP WILLIAMS: Well of course naturally, in the natural state of things in British politics were they not in coalition they'd be railing against this. But because they are in coalition, they're hampered to a degree and we do hear this muted concerns, but that's all that we're hearing from the Lib' Dems.

So so far they're pretty well going along with this, with some reservations, but it's not the Lib' Dems of old, who would've absolutely slammed this.

EMMA ALBERICI: And young people we've already heard there have registered an online protest, if you like?

PHILIP WILLIAMS: Yes, and how ironic that the very traffic that they want to monitor may be the avenue of the greatest protest, that people may organise this sort of social protest, and once this gets going and word gets around, I've no doubt that the government will be hearing from a very - a large number of people through the social media, the very media that they want to look over.

EMMA ALBERICI: I mean, it's one thing to be able to monitor four million CCTV cameras, but 60 million people's communications does seem a big ask.

PHILIP WILLIAMS: Well it's a huge ask and of course they'll use electronic means to pick key words, key phrases that are being used.

But yes, a mammoth task, and as you said earlier, at a time of austerity when they're slashing public services, it does seem like an extraordinary period to be boosting these efforts. Of course the Government says it's necessary for the security of the nation, but there are very many people with very - lots of big questions as whether the actual method is worth it.

EMMA ALBERICI: Philip Williams, thank you so much.

PHILIP WILLIAMS: Thanks.