The UK Border Agency (UKBA), local councils and other bodies have until the end of next week to justify their right to access citizens' communications records.

Home Secretary Theresa May appeared to offer a minor concession to civil liberties campaigners by considering excluding various public organisations from her proposed internet surveillance law.

This is despite the fact that those selected authorities asked to see private communications data roughly 5,000 times in 2011, far fewer than the 500,000 attempts made by spooks, police agencies and the taxman in the same year.

Public bodies were privately told by the Home Office that they have until 20 July to come up with compelling reasons as to why the draft law - if approved by Parliament - should grant them continued access to citizens' communications records.

Local authorities already have powers to pry into this data thanks to the Regulation of Investigatory Powers Act (RIPA). But an amendment due later this year will restrict their access to sensitive information. This follows apparent misuse of the law by councils to investigate minor offences.

Arguably, however, the local councils could see their surveillance powers widened by secondary legislation - which allows the government to change the law after it is passed, if the wording of the act allows this.

During the second half of a joint select committee hearing of MPs and peers, who are scrutinising May's Communications Data Bill, it was revealed by UKBA's director of operational intelligence Gillian McGregor that the Home Office had asked an unspecified number of public bodies to offer up their own business case.

She explained that the Border Agency will submit its application on the reasons why it needed access to comms data – which includes subscriber information, usage and traffic data – to the Home Office, before adding: "It [the right to access the data] could happen through secondary legislation."

Other public body representatives, who were also on the panel giving evidence on Thursday, echoed that comment.

Paul Bettison of the Local Government Association (LGA) said the Home Office had suggested an explanation as to why councils should be able to gain access to comms data. He dismissed accusations that local authority officials had abused their RIPA powers, who said he wanted to "dispel the myths that we've been frivolous in the past".

Bettison told the select committee, which is chaired by Lord Blencathra, that there was "significant confusion" about the bill.

He added: "It would be helpful to have a clear message from the government on this."

The Financial Services Authority was represented on the panel by its legal head of enforcement, Daniel Thornton, who admitted: "We would prefer not to have to make a business case."

Unsurprisingly, all of the public bodies present at the hearing on Thursday were quick to trot out examples of why access to communications data was not simply their desire, but had in fact become "essential" to battling crime in the digital age.

Thornton said the FSA was seeing "more and more sophisticated techniques" being employed by criminals. He gave the examples of secure websites, disposable mobile phones and self-destructing USB devices as examples of what he perceived to be a rapidly changing landscape.

UKBA's McGregor agreed, adding that "serious criminals are making increasing use of a more sophisticated internet" adding that said crooks were also using "smartphone techniques".

Meanwhile Nick Tofiluk – director of regulatory operations at the Gambling Commission – who was also present on the panel pointed to the complexity of P2P gaming platforms that are used on an "international basis".

He tautologically added: "We don't know what we don't know yet."

On the issue of a warrant system being used when public bodies wanted access to comms data, both McGregor and Thornton said it would prove a hindrance to their investigations both for reasons of cost and potential delay.