Ministers are planning a massive increase in their capacity to collect records of people using e-mail, social networking sites and on line game sites, amid fears they are being exploited by terrorists and serious criminals.

The plans to record the details on a huge database are being driven by an explosion in electronic means of communication including social networking, auction sites, video sites and telephoning over the internet.

Police and the security services have warned the Government that the growing fragmentation and complexity of communications is hindering their ability to locate data which is an essential tool in tackling terrorism and organised criminality.

Communications data - the records of phones calls, e-mails and internet traffic but not the content - provided key evidence in helping convict Ian Huntley, the Soham killer and the July 21 bombers.

But the police and the security services say it is becoming difficult to locate data because there are now so many communication service providers.

They also say that the use of multiple user names is thwarting efforts to link individuals to their on line identities.

The proposals for sweeping new means of both retrieving and storing the communications data are to be outlined in a consultation paper to be published by the Home Office early next year.

Jacqui Smith's announcement today that ministers are considering new powers will prompt fears that the UK is heading towards a "Big Brother" state with the authorities able to monitor the public's every move online.

But she said that change was needed to maintain the country's capacity to combat terrorism and serious criminality.

In a speech at Canary Wharf, London, the Home Secretary said that changing technologies - including how development on the internet was changing the nature of communication - were presenting challenges to collecting data.

Ms Smith said this had created a “complex and fragmented” online world, and meant information such as billing data, recording who people were calling and for how long, were not now always being held.

The consultation would try to find “some way or other to collect that data and store it”.

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