THE Government’s secret electronic eavesdropping agency – GCHQ – last night denied it was pressing ahead with plans to monitor all internet use and telephone calls in the UK.

In a rare public statement, it said that a reported £1bn “snooping” project at GCHQ’s hi-tech complex at Cheltenham was simply intended to enable the organisation to keep pace with developments in internet technology.

The Sunday Times reported that the Mastering the Internet (MTI) programme would enable GCHQ to “spy at will” on emails, website visits, social networking sessions, and telephone calls made over the internet.

According to the paper, the scheme involves the covert installation of thousands of “black box” probes across the online infrastructure which would monitor and record all the data which passes through them.

It said that the project was continuing despite an assurance last week by Home Secretary Jacqui Smith that the Government had abandoned plans for a central database to store all UK communications data.

In its statement, GCHQ said: “We must reinvest continuously to keep up with the methods that are used by those who threaten the UK and its interests.”

The statement stressed that GCHQ operated within a strict legal framework which set out the procedures for ministers to authorise interceptions.

“GCHQ follows these meticulously. GCHQ only acts when it is necessary and proportionate to do so.”