The government has announced plans to spend £12 billion on the monitoring of emails, telephone calls and internet browsing records of every person in Britain, it has been revealed.

Government officials hope that if the plan is accepted, it will help in the fight against terrorism as well as different organised crimes through the use of hundreds of hidden devices and a national database tracking the information.

It is understood that the first two service providers that will take part in the controversial scheme are Vodafone and BT, which may be part of a £1 billion allocation to the communications headquarters (GCHQ).

The shadow home secretary Dominic Grieve said of the scheme: "Any suggestion of the government using existing powers to intercept communications data without public discussion is going to sound extremely sinister."

GCHQ was established in partnership with MI5 and MI6 and works closely with the Ministry of Defence and the Foreign and Commonwealth Office.

According to a recent survey by Connect, the two biggest IT headaches for businesses were 'everyday hassles with IT' (37 per cent) and 'security concerns' (32 per cent) In a recent survey of SMEs for Connect, the two most important benefits of outsourcing were 'guaranteed response times' and 'allowing in-house IT staff to concentrate on more strategic issues'