The government's arguments for justifying the mass monitoring of the internet are "unconvincing" and based on exploiting "loopholes" in legislation, the former chief surveillance inspector has said.

Sam Lincoln, who served for seven years as the head of the Office of Surveillance Commissioners, said the revelations by Edward Snowden had damaged public confidence, and security establishment arguments were not being accepted by sections of the public.

In his first interview since standing down, Lincoln told the Guardian that such intrusive powers were necessary tools, but reforms were needed to the law and to the watchdogs overseeing surveillance systems. He said steps had to be taken to ensure public trust and that regulation could keep pace with new Big Brother technologies.

On Tuesday the government's top security official, Charles Farr, said searches on Google on Facebook, Twitter and YouTube as well as supposedly private messages on social media among UK citizens can be monitored by the security services because they are legally judged to be "external communications".

Lincoln said he was unconvinced by Farr's arguments: "Technically they are correct, yes it is legal. These are the sort of loopholes in the legislation which they can exploit, but it is a pretty unconvincing argument. It is a convenient and unconvincing argument, however legal it may be.

"A lot of these issues go beyond legal questions, they bring in moral, ethical and social considerations."

Lincoln became chief inspector with the surveillance watchdog after a 28-year career spent mostly in military intelligence where he rose to the rank of lieutenant colonel.

He served on the Defence Intelligence Staff and was commanding officer of the Defence Human Intelligence training establishment, working in places including Northern Ireland and Kosovo. He is covered by the Official Secrets Act and believes those in the intelligence services and law enforcement granted intrusive powers behave largely ethically, in the public interest, and help protect the public from terrorism and serious crime.

Lincoln said a package of reforms was needed, not just reform of including to the laws governing intrusive or covert surveillance, the Regulation of Investigatory Powers Act, passed in 2000, but he added: "Reforming the legislation on its own won't deal with the next issue.You will never get legislation that will keep up with the technology." "In hindsight I do not think our structures are correct. The argument that its all OK because it is legal it's difficult to sustain."

The official watchdogs responsible for making sure intrusive powers are not abused by the state should be abolished and replaced by a single body.

The Office of Surveillance Commissioners covers covert activities by law enforcement and public authorities. There is a separate commissioner for intercepts and the intelligence service has its own part time commissioner, a retired judge, who has a support staff of one.

The investigatory powers tribunal, which adjudicates complaints, should also be part of a new single oversight commission, said Lincoln, who believes the terms of reference should be reexamined: "The terms of reference would benefit from a review given the opaqueness of the system."

He added: "How can an oversight body assess the performance of those conducting secret and covert activities, that can meet public confidence?"

In his own work, he said he and fellow officials saw 10% of the paperwork authorising intrusive powers: "We had no power to dictate … persuasion was the only tool in the box." Lincoln said paperwork justifying the use of powers by the security services, which the surveillance commissioners did not oversee,were less rigorous than that from law enforcement.

He also said that on some occasions the law meant surveillance commissioners could not see the underlying intelligence used to support an application to use intrusive powers. This was because it was based on an intercept, which they were not allowed to see and whose use was governed by a different body, namely the intercept commissioner. They had to allow the authorisation based on trust.

He said additional reforms could include naming and shaming of those who regularly abuse their powers, and independent members being appointed to a new single commission, which would benefit from members who have conducted covert operations. "Judges come in with little experience of the legislation let alone with any understanding of how covert work is conducted. Therefore they are more liable to accept it rather than stopping it."

Lincoln said there was no stark choice between security or privacy. The debate between the security establishment and privacy campaigners had become too polarised and both sides had lapsed into becoming too strident.

He said security chiefs need to be more willing to explain and engage with the public: "The approach of 'why are you challenging us, we are the good guys' doesn't wash … The 'looking for a needle in a haystack' argument has so far been unconvincing. I haven't been convinced."

"National security", the justification for mass surveillance revealed by Snowden, was too nebulous a term and needed better definition.