Any suggestion of a central "super database" has been ruled out but the plans are expected to involve service providers storing all users details for a set period of time.
That will allow the security and police authorities to track every phone call, email, text message and website visit made by the public if they argue it is needed to tackle crime or terrorism.
The information will include who is contacting whom, when and where and which websites are visited, but not the content of the conversations or messages.
Guy Herbert, general secretary of the No2ID campaign group, said: "We should not be surprised that the interests of bureaucratic empires outrank liberty. "It is disappointing that the new ministers seem to be continuing their predecessors' tradition of credulousness."
