Britain's security and intelligence agencies should consider how far they are invading people's privacy when they seek permission for intrusive surveillance, their government-appointed watchdog has recommended.

Sir Mark Waller, the intelligence services commissioner, said the agencies should set out the specific invasion of privacy requested so that a proper assessment could be made of whether it was justified.

Waller made the recommendation as part of his report for 2013, by far the most detailed of the three annual reports he has written. It has just been published on his website, with the exception of a confidential annexe.

He also disclosed that there were more than 400 cases last year in which UK officials had to consider whether there was a serious risk of a detainee being subjected to unacceptable conduct at the hands of a foreign government service.

The commissioner, a former appeal judge, said he had spoken to the heads of the security service MI5, the secret intelligence service MI6 and the eavesdropping centre GCHQ about the revelations made by Edward Snowden, the computer analyst whistleblower who provided the Guardian with top-secret National Security Agency (NSA) documents leading to revelations about US surveillance on phone and internet communications.

Andrew Parker, Sir John Sawers and Sir Iain Lobban had told the Commons intelligence and security committee last November that alerting targets and adversaries to the agencies' capabilities made it more difficult for them to acquire the intelligence needed by the UK.

"The agencies provided me with clear evidence to substantiate this," Waller wrote in his report to the prime minister. "In the interests of national security, I am not in a position to give further details in my open report."

Waller enlarged on the one-word responses he himself gave in March when asked by the Commons home affairs select committee about claims that GCHQ could circumvent UK laws by making use of information obtained by the NSA from US-based internet companies under the Prism programme.

In an apparent reference to the Guardian's report of 7 June, he says: "When I first read about it, I was extremely concerned, as many other people were. However, as the intelligence services commissioner, I was able to visit GCHQ immediately and confront them about the allegations. I first did so on 13 June 2013 and again on 10 July."

Waller says he was briefed in depth before questioning a number of senior GCHQ officials, including a GCHQ lawyer.

My questions were probing and challenging. I also questioned Sir Iain Lobban, the director of GCHQ. The results of this questioning and briefing allowed me to conclude that GCHQ were not circumventing the law in the UK.

Waller's reference to the UK may be significant: the intelligence agencies make no claims that they comply with local laws outside the British Isles.

Waller also dismisses claims that GCHQ does not have the statutory power to conduct an electronic operation using a CHIS, or covert human intelligence source. These sources are agents or informers who are authorised to obtain information from people without revealing that they are working for the intelligence services.

As commissioner, Waller's role is to act as the retrospective auditor of warrants issued by secretaries of state authorising intrusive surveillance and interference with property (such as breaking into people's homes or cars to instal cameras and microphones). He also reviews the authorisations that certain designated officials can grant, for example to permit the use of a CHIS.

Before invading people's privacy, the intelligence services must satisfy the minister that intrusive surveillance is necessary and proportionate, which means that the intelligence gain will be sufficiently great to justify the intrusion into the privacy of the target and any unavoidable collateral intrusion into the privacy of others. The commissioner says he questions staff about how they have applied the tests of necessity and proportionality.

Concerns that the interference may have been disproportionate seem to have prompted Waller's insistence that the agencies pay more attention to privacy in future. "I have recommended to all the agencies that separate consideration be given to the individual privacy being invaded as part of the test for proportionality," he said in his concluding chapter. "In all cases, I want to see this set out separately in the application for these intrusive techniques and to see this wording reflected in the warrants."

While this recommendation is clearly meant to make the agencies think twice, it is not clear whether it will prevent them from obtaining warrants that they could have obtained under existing arrangements. The agencies say they already consider proportionality as a fundamental principle and promote compliance through regular staff training. On the other hand, the commissioner would presumably not have made his recommendation unless he thought that the issue of privacy needed to be in the forefront of people's minds.

Waller was confident that the agencies were acting within the law and not trying to circumvent the constraints under which they operated. The total number of warrants approved across the intelligence services and MOD in 2013 was 1887. This compares with 2838 the previous year, but the 2012 figure is regarded as misleading because a number of existing warrants were reissued on a new electronic system.

The number of errors reported to the commissioner last year was 33, an increase of three on the year before. "All were caused by human error and all resulted in intrusions into privacy to some degree." However, none was intentional.

Examples are given in Waller's report. The security service allowed an MI5 agent's authorisation to act as a CHIS to lapse for nine days. However, the agent "did not engage in any covert activity against individuals of intelligence interest during this period so any unauthorised invasion of privacy was minimal".

An SIS desk officer did not realise that an authorisation for operational activity overseas needed to be signed by a senior official at the Foreign and Commonwealth Office (FCO) as well as by an SIS director. That was rectified retrospectively.

And a GCHQ analyst "failed to update the parameters of an operation in a tasking document, with the result that the operation was not properly limited to the minimum parameters necessary". Despite the opaque language, this seems to have been regarded as significant error because unauthorised information was destroyed and procedures were tightened.

Waller spotted eight errors in the sample of 318 warrants and authorisations he reviewed in 2013, a "marked increase" on the one error he discovered last year. One of the eight errors, was the fault of a government department rather than an intelligence agency but Waller reminded the agencies that it was their job to check that they had proper authorisation for their activities.

The government department responsible for the error could have been the Home Office, the FCO or the Northern Ireland Office. Each has a so-called warranty unit responsible for processing applications from MI5, SIS or GCHQ for property interference, intrusive surveillance or activities abroad. These units check and summarise requests for warrants before presenting them to the secretary of state for approval.

Waller revealed that the Northern Ireland secretary Theresa Villiers had refused to issue a warrant on one occasion. No further details were given although the reader may infer that she did not regard the warrant as both necessary and proportionate.

The Home Secretary gave more details of how these warrants were used in a speech on Monday. Theresa May said: "I approve warrants only on the basis of detailed intelligence and a reasoned explanation of their likely benefit. Sometimes I demand more information before taking a decision or I make my approval conditional. On some occasions I refuse the application."

Waller's report provides more information than he has previously disclosed about the government's consolidated guidance on the detention and interviewing of detainees overseas, which was published in 2010. This bans torture as well as cruel, inhuman or degrading treatment or punishment (CIDT).

"The UK policy on such conduct is clear," Waller wrote. "We do not participate in, solicit, encourage or condone the use of torture or CIDT for any purpose."

But his job was to monitor cases in which there was a risk that a detainee being held by a "liaison service" — presumably a foreign government agency or intelligence service — might be subjected to torture or CIDT. These included cases where a detainee was interviewed by UK personnel while under the custody of a third party; cases where information was passed by the UK agencies to a liaison service in relation to a detainee held by a third party; and cases where the UK might seek the detention of an individual by a third party.

Waller disclosed that the number of cases in which the consolidated guidance was applied during 2013 was 418. These were cases "where consideration had to be given as to whether there was a serious risk of an individual being subject to unacceptable conduct, either because they were in the detention of a liaison service or if intelligence was supplied to solicit detention and they were then detained".

Waller stressed that 418 was not the number of individuals subject to unacceptable conduct; only that proper consideration was being given to that risk in this number of cases. In some instances, it was decided that the risk of mistreatment was not serious and action could be taken; in others it was decided that there was such a serious risk to an individual if detained that no intelligence should be shared. Waller said he not published such figures before because they could "easily be misinterpreted by those who might wish to do this country harm or make false allegations against it".

Commenting on his report, Waller said it was important that the public had confidence in his oversight of the intelligence services. "I remain committed to being as open as I can without prejudicing national security or law enforcement and this report is intended to provide the public with the assurance they are entitled to expect."