A senior Liberal Democrat Cabinet minister today called for "proper political oversight" of the intelligence services in the wake of disclosures about the collection of communications data by the Government's secret eavesdropping station GCHQ.
Business Secretary Vince Cable said that The Guardian newspaper had performed "a very considerable public service" in publishing secret material leaked by whistle-blower Edward Snowden, which revealed the extent of mass surveillance programmes operated by the US National Security Agency and Cheltenham-based GCHQ.
He confirmed reports that Deputy Prime Minister Nick Clegg was seeking a rethink of the way politicians oversee the operations of Britain's intelligence service.
Cable's comments came as a senior Whitehall security expert said that the Snowden leaks amounted to the "most catastrophic loss to British intelligence ever".
Sir David Omand, the former head of GCHQ who was once homeland security adviser to Number 10, said the leak of tens of thousands of files by the former US intelligence operative eclipsed the Cambridge spy ring, which saw five university students recruited as Soviet spies.
Earlier this week, MI5 head Andrew Parker warned that the Snowden leaks were a "gift" to terrorists, by exposing the ''reach and limits'' of the GCHQ listening post. His comments sparked criticism in some quarters of The Guardian's decision to give Snowden publicity.
But Mr Cable defended the newspaper, telling BBC Radio 4's Today programme: "I think The Guardian has done a very considerable public service. I think Mr Snowden's contribution is twofold, one of which is a positive one - which is whistle-blowing - and the other of which is more worrying, that a large amount of genuinely important intelligence material does seem to have been passed across.
"The conclusion that Nick Clegg came to and set out this morning is that we do need to have proper political oversight of the intelligence service and arguably we haven' t done until now.
"What they did as journalists was entirely correct and right. Snowden is a different kettle of fish."
Aides to the Deputy Prime Minister told The Guardian that Clegg is considering how to update the legal oversight of Britain's security services and would be calling on experts to discuss the implications of new surveillance technologies for public accountability and trust.
Sir David told the Times that British officials assumed the information released by Snowden was being analysed by Russian and Chinese spy agencies.
"You have to distinguish between the original whistle-blowing intent to get a debate going, which is a responsible thing to do, and the stealing of 58,000 top-secret British security documents and who knows how many American documents, which is seriously, seriously damaging," he said.
"The assumption the experts are working on is that all that information or almost all of it will now be in the hands of Moscow and Beijing. It's the most catastrophic loss to British intelligence ever, much worse than Burgess and Maclean in the 1950s."
Donald Maclean and Guy Burgess were among five people who passed information to the Soviet Union during the Second World War and at least into the early 1950s.
Snowden, who is in Russia, leaked information to the Guardian in May that revealed mass surveillance programmes such as the NSA-run Prism and GCHQ's Tempora.
Under the £1 billion Tempora operation, GCHQ is understood to have secretly accessed fibre-optic cables carrying huge amounts of internet and communications data and shared the information with the NSA.
The Guardian has defended publishing the disclosures as Tory MP Julian Smith demanded Government clarification that the newspaper has not broken the law by sending detailed personal information about British spies across borders.
Sir David told the Times that newspapers were not well-placed to judge the security implications of information they published.
"That was a straightforward revelation of detail of an intelligence technique which should have remained secret," he said.
Speaking on his weekly radio phone-in on LBC 97.3 yesterday, Mr Clegg said: "I think there is a totally legitimate debate to be had - and my experience speaking to people in the intelligence agencies is they recognise this - about the use of these new, incredibly powerful technologies.
"We have regulations that were designed for an age which is quite different now. Both terrorists and states and security agencies now conduct this battle online in a way that was unimaginable just a few years ago."