A 'super database' that would have held details of every telephone conversation, text message, email and web visit in the UK has been scrapped by the government.
Home secretary Jacqui Smith admitted the database was an "extreme" solution that would have been an intrusion of privacy. Instead, ISPs and network operators will be expected to hold their own data privately.
This is expected to cost taxpayers up to £2bn over 10 years. ISPs are currently required by law to hold details of emails sent but not the content and only for 12 months.
"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. However, to be clear, there are absolutely no plans for a single central store," she said.
The super database was first announced in May last year but attracted huge amounts of criticism over the privacy of the sensitive data and the potential security problems regarding how the data would be stored.
Information Commissioner Richard Thomas said: "You can tell an awful lot about some people's personal circumstances from the people they are talking to and the websites they visit. It is important that the proposals are tightly defined and minimise the level of intrusion, with appropriate safeguards in place".