Foreign Secretary William Hague has insisted that he has seen no evidence of breaches in the UK's protection of the privacy of individuals' communications, following reports that British spies are able to look at texts scooped up in a secret operation which collects hundreds of millions of messages.
The allegations, resulting from the latest leaks by former US spy Edward Snowden, were made by Channel 4 News and the Guardian, who have seen a classified 2011 presentation discussing Dishfire, a secret database created by the US National Security Agency (NSA) that collects nearly 200 million texts every day from around the world.
Reports suggested that Dishfire stores the messages for future use and British spies - who face tough laws restricting interception of communications in the UK - have been given a back door to exploit that information.
Mr Hague declined to comment directly on the new allegations, but told BBC Radio 4's Today programme: "I set out in June, when these controversies first arose, the position in the United Kingdom, the very, very strong legal checks and balances that we have in the UK.
"I'm not going to comment on the detail of any allegations or leaks or alleged leaks. I can't possibly do that. But I can say what I said on June 10 to Parliament about our legal system, about the very strong system of checks and balances, of warrants being required from me or the Home Secretary to intercept the content of the communications of anyone within the United Kingdom.
"That system is not breached. I've never seen anything to suggest that system is breached. We have perhaps the strongest system in the world, in which not only do I and the Home Secretary oversee these things, there are then commissioners - the interception of communications commissioner, for instance - who oversee our work and report to the Prime Minister on how we do that.
"No country has a stronger system than that."
According to reports, Dishfire traces people when they take their mobile phone abroad by capturing the welcome text message from phone companies triggered by their arrival overseas, telling agents where they were and when they got there.
It is claimed the texts help the NSA to track people's whereabouts, their contacts, their banking details and their movements if they travelled from country to country.
Under US law, the American spies had to delete the data for its own citizens but texts coming to and from international mobile phones - including those belonging to Britons - were fair game and could be spied upon at will.
On British soil, spy agencies can only access text message data of specific targets with permission under the Regulation of Investigatory Powers Act (Ripa), and if they want to see the content of the message they must get a warrant from a secretary of state.
By contrast Dishfire collects data on everyone, so by accessing the system, British spies can pull out information they would not be entitled to under strict British laws.
Communications giant Vodafone told Channel 4 News they were "shocked and surprised" by this potential for exploitaiton while former interception commissioner Sir Swinton Thomas said he would have been concerned about this kind of use of foreign intelligence agency data.
"What you're describing sounds concerning to us because the regime that we are required to comply with is very clear and we will only disclose information to governments where we are legally compelled to do so, won't go beyond the law and comply with due process," Stephen Deadman, group privacy officer and head of legal for privacy, security and content standards at Vodafone Group, told Channel 4 News.
"But what you're describing is something that sounds as if that's been circumvented. And for us as a business this is anathema because our whole business is founded on protecting privacy as a fundamental imperative."
Describing it as "a worry" Sir Swinton noted: "Certainly in my time I would take the view that it is not open to our intelligence services to obtain or certainly to use communications or data which would not have been lawful in this country."
The NSA has stated that Dishfire does exist and that it lawfully collects SMS data. It also stated that privacy protections are in place for US citizens, according to Channel 4 News.
GCHQ said: "All of GCHQ's work is carried out in accordance with the strict legal and policy framework which ensures that our activities are authorised, necessary and proportionate and that there is rigorous oversight."
Mr Snowden, a former NSA contractor, is now hiding in Russia after leaking classified US government documents.
Shami Chakrabarti, director of Liberty, argued that the latest Snowden allegations show there is a need for universal human rights.
She claimed: "It is too easy for governments to contract out abuse of their own citizens by getting friendly allies to do their dirty work. The Snowden revelations demonstrate governments' ambitions - no privacy for us and no scrutiny for them."
Prime Minister David Cameron and US president Barack Obama discussed the controversy over data privacy in a phone call shortly before the latest disclosures became public.
Mr Obama is expected to announce new restrictions on the collection of phone records by American intelligence in a much-anticipated speech on the issue.
In a statement about the two leaders' conversation, a Number 10 spokeswoman said: "The president updated the Prime Minister on the US signals intelligence review ahead of setting out... his administration's response to the review.
"The two leaders welcomed the unique intelligence sharing relationship between their two countries."
Guardian editor Alan Rusbridger told the Today programme: "(Mr Hague) talked about being within the law in terms of content. This is not content, this is metadata, which politicians and security chiefs always make sound harmless, as though it were just billing data. It's not billing data, the world has moved on. What people can tell about metadata is almost everything about you.
"Contrary to what William Hague says, the documents we have seen say that the reason the NSA likes working here is because of the light legal regime here, not because we have the tightest legal regime in the world."
Mr Rusbridger warned of "complacency" in the UK political world about the Snowden revelations.
"Both the main political parties feel compromised by this," he said. "Labour are not keen to get involved because a lot of this stuff was done on their watch. That of course has raised the whole question of oversight. We have a parliamentary committee with a tiny budget of £1 million overseeing the three agencies with over £2 billion. I just don't believe they've got the technological expertise or the resource to look into this."
He added: " This is a remarkable day. The President of the United States responding to information that's been put into the public domain by newspaper not by the oversight committees that are supposed to look after these things, and in response to 46 recommendations from his own panel of experts, will be announcing changes.
"Here, there's been barely a whisper from Westminster. I think they are closing their eyes and hoping it will go away. But it's not going to go away, because it's impossible to reform the NSA without that having a deep knock-on effect on what our own intelligence services do."
Mr Rusbridger rejected claims from MI6 chief Sir John Sawers that the Guardian's revelations were putting intelligence operations and the UK's security at risk.
"That was a very theatrical moment, but there was no evidence attached," he said.
He added: "The NSA is collecting 200 million records a day on people who are not suspected of anything. This is warrant-less, suspicion-less collection of data on all of us, and that's why it has become such a huge issue amongst people who think this is a bit disturbing.
"It may be that, once this is fully debated, people will say that they are willing to exchange that in return for security, though as the debate has gone on expert after expert has said that there is no evidence that this stuff is preventing terrorist attacks."