The Government has spent more than £18m snooping on emails and telephone calls over the past five years.
Under a code of practice agreed by Parliament in 2003, ISPs and telecommunications companies must retain data regarding users' communications. According to the the 2001 Anti-terrorism, Crime and Security Act and the 2007 Data Retention Regulations, they have the right to apply for a grant to cover the cost of survelliance equipment used to obtain this data.
According to Dr Richard Clayton, the UK Crypto list shows that in 2004 the grants totaled £84,582 but by 2007 this had risen dramatically to £8.3m. More than £4m in grants have already been awarded this year, and projected figures look set to mirror those in 2007.
"What you're seeing is much larger entities obtaining money for data retention," Clayton says.
"Note that this is in the run up to the time when the mobile companies and telcos had to move to retaining data for a year; whereas one might suspect that 2004 was all about tiny little ISPs."