By Danny Shaw
Home affairs correspondent, BBC News
The government says police risk losing the ability to fight crime and terrorism
How do you find out what a terrorist, spy or criminal is up to?
By monitoring them, of course.
That may involve relying on informants and agents to pass on information.
It could entail surveillance by officers covertly observing them.
Or it might mean planting bugging devices to listen to their conversations.
One of the most powerful intelligence tools is the interception of telephone calls and e-mails to listen to conversations or read messages.
This power is tightly regulated and requires the permission of the home secretary.
Far more widely used are powers to track a suspect's telephone calls, texts, e-mails and internet use, to find out whom they're communicating with, how frequently they're in touch, and in the case of the internet, what websites they're visiting.
This does not involve viewing or listening to content.
This information - known as "communications data" - is held for billing and business use by telephone companies, communications firms and internet service providers.
The data may also include other details, such as the time a message or e-mail was sent, and the location from which calls are made.
There are clearly considerable civil liberty concerns and privacy issues which will need to be overcome for any new scheme to get off the ground
Under legislation, law enforcement agencies can request access to communications data - the companies involved are obliged to hold on to it for 12 months.
It's a vital tool for police and the security and intelligence services - and not just for terrorism and serious crimes.
Last year, in the Metropolitan Police, there were 54,000 requests to access communications data, including 650 applications to trace missing people.
Assistant commissioner John Yates says the availability of communications data is "absolutely crucial" in developing investigative leads, establishing the link between co-conspirators and helping to save lives.
"Its importance to investigating the threat of terrorism and serious crime cannot be overstated," he says.
The Crown Prosecution Service reckons that communications data forms an important element of prosecution evidence in 95% of serious crime cases.
The Serious Organised Crime Agency (Soca), HM Revenue and Customs and the Office for Security and Counter-Terrorism at the Home Office all agree that it's a vital investigative tool.
Jacqui Smith said intercepting communications was 'vital'
But they're concerned that the availability of communications data in the fight against crime is being put at risk by the increasingly complex and sophisticated nature of communications technology.
Until recently, monitoring phone usage was relatively straightforward - calls went on a single line from one phone to another.
But new phone networks are increasingly based on internet technology, which is cheaper and more flexible.
They offer a wide range of services, allowing people to message and speak to each other on social networking, gaming, auction and video sites.
There's some evidence, for example, that criminals are using gaming sites not to play games but to exchange messages in order to avoid detection.
Sites such as Skype, which make use of Voice Over Internet Protocol (VOIP), are also used.
Crime rise threat
The problem for law enforcement agencies is that many of these sites do not hold their own communications data.
So, even if the authorities are able to find out which websites a suspect is visiting, they can't necessarily track the phone calls and messages within the sites, to find out who's talking to whom, when, how often and for how long.
The Serious Organised Crime Agency offers a dire warning
The use of multiple and false identities by suspects and the increasing number of sites, telephony and internet companies complicates the picture even further.
Since 2006, law enforcement agencies and government officials have been working out ways to combat the problem.
The project is known as the Interception Modernisation Programme.
Its conclusion is that legislation will be needed to improve the collection and storage of communications data.
If nothing is done, Sir Stephen Lander, chair of Soca, predicts "more unsolved murders, more firearms on our streets, more successful robberies, more unresolved kidnaps, more harm from the use of Class A drugs, more illegal immigration and more unsolved serious crime overall".
Among the options thought to be under consideration is a huge database of communications data.
Data about use of telephones, internet and e-mails would be channelled to one central point, but the database would not store the content of people's messages or calls.
Another possibility is that internet service providers and communications companies would be given some government funding to improve the way they collect and store data.
No decisions have been taken yet. There are clearly considerable civil liberty concerns and privacy issues which will need to be overcome for any scheme to get off the ground.
But counter-terrorism officials have warned that there is no time to lose. "The ground is shifting under our feet," said one.
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