Britain's electronic eavesdropping agency GCHQ has been covertly gathering information from leading internet companies through a secret US spy programme, it has been reported.
The Guardian said that it had obtained documents showing that GCHQ had access to the Prism system, set up by America's National Security Agency (NSA), since at least June 2010.
The documents were said to show that the British agency, based at Cheltenham, had generated 197 intelligence reports through the system in the 12 months to May 2012 - a 137% increase on the previous year.
The newspaper said that the Prism programme appeared to allow GCHQ to circumvent the formal legal process required to obtain personal material, such as emails, photographs and videos, from internet companies based outside the UK.
The reports were described as "chilling" by Labour MP Keith Vaz who said: "I am astonished by these revelations which could involve the data of thousands of Britons.
"The most chilling aspect is that ordinary American citizens and potentially British citizens too were apparently unaware that their phone and online interactions could be watched.
"This seems to be the snooper's charter by the back door. I shall be writing to the home secretary asking for a full explanation."
GCHQ refused to comment directly on the report, but in a statement it insisted that it operated within a "strict legal and policy framework".
"GCHQ takes its obligations under the law very seriously," the statement said.
"Our work is carried out in accordance with a strict legal and policy framework which ensures that our activities are authorised, necessary and proportionate, and that there is rigorous oversight, including from the Secretary of State, the Interception and Intelligence Services Commissioners and the Intelligence and Security Committee."
The existence of the Prism system was disclosed in earlier reports by The Guardian and The Washington Post.
Prism was said to have been established in 2007 under changes to US surveillance laws passed under President George Bush and renewed last year under Barack Obama in order to provide in depth surveillance on live communications and stored information on foreigners overseas.
According to the leaked document, "special programmes for GCHQ exist for focused Prism processing" - suggesting the British agency may have been receiving material from a part of the programme specifically designed to meet its needs.
MPs expressed concern at the report. Senior Tory David Davis said it was difficult to reconcile GCHQ's statement that it was subject to proper scrutiny with the fact that Parliament had no knowledge of the programme whatsoever.
"In the absence of parliamentary knowledge approval by a secretary of state is a process of authorisation, not a process of holding to account. Since nobody knew it was happening at all there is no possibility of complaint," he said.
Shadow home secretary Yvette Cooper said: "In the light of these media reports, the Prime Minister should brief the Intelligence and Security Committee on what ministers know and should ask the Intelligence and Security Committee to report on the UK's relationship with the Prism programme, the nature of intelligence being gathered, the extent of UK oversight by ministers and others, and the level of safeguards and compliance with the law.
"It is important for the UK intelligence community to be able to gather information from abroad including from the United States, particularly in the vital counter-terror work they do.
"However, there also have to be legal safeguards in place, including proper protection for British citizens' privacy, proper oversight and checks and balances to make sure intelligence powers are not misused. And the public need confidence that their privacy is being properly respected and protected.
"That is why the Prime Minister, Home Secretary and Foreign Secretary, and all the intelligence agencies should provide full information to the Intelligence and Security Committee as swiftly as possible, and the ISC should have full support to pursue this and report."
Liberal Democrat Julian Huppert, a member of the Commons Home Affairs Committee, said he hoped to force the Government to respond to an urgent question on the issue in Parliament on Monday.
"There are a lot of questions that need to be asked. I plan to table a whole series of questions and raise the issue in Parliament on Monday," he said.
"We have to understand exactly what information they have had and what the safeguards are. It's deeply, deeply alarming."
Earlier on Friday, campaigners warned that the "sheer horror" in the US over the alleged data mining by the US government of private communications using internet companies like Google, Yahoo and Facebook should be a stark warning to what could happen in the UK under the so-called 'Snoopers' Charter'.
The Washington Post reported that the US National Security Agency has been extracting audio, video, photographs, e-mails, documents and connection logs that enable analysts to track a person’s movements and contacts over time, under the auspices of the 2001 Patriot Act.
The uproar across the ocean could not have come at a worse time for those who favour resurrecting the Data Communications Bill, which would allow the UK government to monitor internet activity, it already has the power to monitor phone calls.
The Prism scandal "shows securocrat ambition for mass surveillance knows no bounds," Rachel Robinson, Policy Officer for human rights group Liberty told HuffPost UK.
"We must resist home-grown attempts to set us on the same path. The Snoopers’ Charter would open a Pandora’s box, co-opting private companies into handing over intimate details about our lives – turning us all into suspects, not citizens."
Nick Pickles of the civil liberties campaign group Big Brother Watch said questions needed to be asked at the "highest levels" to establish whether British citizens had had their privacy breached "without adherence to the proper legal process or any suspicion of wrongdoing".
"There are legal processes to request information about British citizens using American services and if they are being circumvented by using these NSA spying arrangements then that would be a very serious issue," he said.
The existence of the Prism programme was confirmed by the US director of national intelligence James Clapper, although he said The Guardian and The Washington Post reports contained "numerous inaccuracies".
"Information collected under this programme is among the most important and valuable foreign intelligence information we collect, and is used to protect our nation from a wide variety of threats," he said in a statement.
"The unauthorised disclosure of information about this important and entirely legal program is reprehensible and risks important protections for the security of Americans."
The statement made no reference to GCHQ involvement in the programme.
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