Plans to track all e-mails sent, all phone calls made and all internet pages visited in the UK are being unveiled by Home Secretary Jacqui Smith.
Communications companies are being asked to record all internet contacts between people to modernise police surveillance tactics in the UK.
Ministers say the move is needed so police and the security services can investigate crime and terrorism.
Home Secretary Jacqui Smith ruled out creating a single database - but wants companies to hold and organise the information for the security services.
Ms Smith said there would not be a new database created - service providers would have to store details instead.
The new system would track all e-mails, phone calls and internet use, including visits to social network sites.
Shadow home secretary Chris Grayling said: "We must not allow ourselves to become a Big Brother society."
Ministers say police and the security services need new tools to fight crime.
The consultation about the programme, which is to track details of when and where electronic communications are made but not their content, has already been delayed.
Current model
Ministers say it is merely intended to update powers which already exist for ordinary phone calls to cover data and information online - such as internet-based phone calls.
Details of the times, dates, duration and locations of mobile phone calls, numbers called, websites visited and addresses e-mailed are already stored by telecommunications companies for 12 months under a voluntary agreement.
Communications data is an essential tool for law enforcement agencies to track murderers and paedophiles, save lives and tackle crime Jacqui SmithHome secretary
The data can be accessed by police on request but the government said it planned to take control of the process in order to comply with an EU directive and make it easier for investigators to do their job.
Information would be kept for two years by law and ministers had been considering creating a central searchable database - but Ms Smith has now ruled that out.
Instead she is proposing a system based on the current model - where data is collected by communication service providers with police, intelligence agencies and public authorities having regulated access.
Data originating abroad but crossing networks in the UK will also be required to be stored by communication service providers.
'Delicate balance'
Ahead of the publication of the full consultation document Ms Smith said: "My key priority is to protect the citizens of the UK, and communications data is an essential tool for law enforcement agencies to track murderers and paedophiles, save lives and tackle crime.
"Advances in communications mean that there are ever more sophisticated ways to communicate and we need to ensure that we keep up with the technology being used by those who would seek to do us harm.
It is a hallmark of free societies that whilst the police target criminal suspects, government does not monitor the entire population Shami ChakrabartiLiberty
"It is essential that the police and other crime-fighting agencies have the tools they need to do their job. However, to be clear there are absolutely no plans for a single central store.
"We recognise that there is a delicate balance between privacy and security, but to do nothing is not an option as we would be failing in our duty to protect the public."
When the idea of the database emerged last year the Liberal Democrats called the idea of a giant database "Orwellian".
Shami Chakrabarti, director of civil rights group Liberty, said: "It is a hallmark of free societies that whilst the police target criminal suspects, government does not monitor the entire population."
