UPDATED: Edward Snowden denies being the source of the Independent story

Britain has a £1 billion secret Middle East-based listening post collecting emails, phone calls and web traffic on behalf of western intelligence agencies, the NSA whistleblower Edward Snowden has revealed.

The Independent revealed it had learned of the internet-monitoring station facility from the leaks made by the US fugitive.

The secret internet-monitoring project is still a work in progress and is being organised by the Government Communications Headquarters (GCHQ), according to Edward Snowden’s leaked documents.

The facility accesses web traffic by tapping into underwater fibre optic cables connecting the region to the internet but the location of the site was not reported.

edward snowden

Edward Snowden has revealed Britain has a secret middle-east surveillance base

In a sensational twist, the newspaper claimed fears the site could be discovered was one of the reasons the Government asked the Guardian to destroy hard drives containing a copy of the Snowden files.

The operation is part of a wider GCHQ surveillance and monitoring system, code-named Tempora, a £1 billion scheme to monitor communications around the world.

Information collected at the installation is sent to GCHQ's headquarters in Cheltenham and shared with the National Security Agency in the US.

Content is held in storage "buffers" before being sifted for material of particular interest.

The listening post was established under the last government under a warrant signed by former foreign secretary David Miliband.

The warrant authorised GCHQ to collect information about the "political intentions of foreign powers", terrorism, proliferation, mercenaries and private military companies, and serious financial fraud.

The issue is revisited every six months and can be changed by ministers at will. GCHQ officials are free to target anyone who is overseas or communicating from overseas without further checks or controls if they think they fall within the terms of a current certificate.

The Independent said the information about the project was contained in 50,000 GCHQ documents Mr Snowden downloaded during 2012.

Much of the material reportedly came from an internal Wikipedia-style site called GC-Wiki. Unlike the public Wikipedia, GCHQ's wiki was generally classified Top Secret or above.

The Foreign Office refused to confirm or deny the accuracy of the reports when contacted by the Press Association, saying only that it did not comment on intelligence matters.

The revelation follows the Metropolitan Police’s launch of a terrorism investigation into information found on the computer of Guardian journalist Glenn Greenwald’s partner, David Miranda.

The data, along with all of Miranda’s electronic devices, was seized during a nine-hour detention in Heathrow airport on Sunday. British authorities held Miranda under Schedule 7 of the UK’s Terrorism Act.