Labour wants new powers that allow security services to crack down on cyber-crimes, but only with extra checks on how sensitive data is used.
A 30 per cent hike in recorded online fraud is just the "tip of the iceberg", shadow home secretary Yvette Cooper will warn, but fears about abuse of information by British intelligence agency GCHQ in the wake of leaks by ex-US security contractor Edward Snowden means new safeguards are needed to protect privacy.
Last year controversial plans by Home Secretary Theresa May to enable the police and security services to track emails and other online communications under what was labelled a "snooper's charter" were blocked by the Liberal Democrats.
Cooper will warn the government it must not "bury its head in the sand" as she calls for reforms to keep up with the ever-changing cyber world, saying much stricter controls over access to private data must be introduced to give the public confidence amid fears about the way information can currently be accessed and used.
Today, in a speech in central London to the Demos think tank, Cooper will call for a new national strategy for tackling online fraud, tougher action to tackle online child pornography and an overhaul of parliament's Intelligence and Security Committee, which keeps a check on the work of the intelligence agencies.
She is expected to say: "In the face of growing online crime and abuse, and the use of online communications by criminals and extremists, the police, intelligence and security agencies need to be able to operate more effectively in this digital world. But for them to do so, we also need stronger safeguards and limits to protect our privacy and sustain confidence in their vital work.
"The oversight and legal frameworks are now out of date. That means we need major reforms to oversight and a thorough review of the legal framework to keep up with changing technology. And there are difficult wider challenges about privacy, data and the private sector, and how we protect British citizens' interests in a global Internet where everyone follows different rules.
"Above all we need the government to engage in a serious public debate about these new challenges and the reforms that are needed. Online communication and technology is forcing us to think again about our traditional frameworks for balancing privacy and safety, liberty and security.
“The government can't keep burying its head in the sand and hoping these issues will go away – they are too important for that, for our liberty, our security, the growth of our economy and the health of our democracy."
Cooper will highlight the growth in online child abuse as one of the most disturbing developments. Last year the Child Exploitation and Online Protection Agency received 18,887 reports of child abuse – an increase of 14 per cent on the year.
But according to Christian Berg, CEO of NetClean, a company that works with police, Internet service providers and private companies to prevent the exchange of child sexual abuse material, tough words are not enough to tackle the problem.
“Today’s cyber criminals are becoming more sophisticated and their crimes are more complex to investigate,” he said. “The widespread use of smartphones and digital cameras means that police must process a mass of visual evidence as well as written or numerical data. Existing forensic tools aren’t designed to deal with this.
"Police and intelligence services can’t act tougher without the right tools to help them do so. Cyber crime investigations today require police to process terabytes of data comprising millions of individual files. They can't do this effectively with manpower alone.
“It’s definitely possible to take a tougher approach without infringing on privacy. Illegal content can be identified without either a human or a computer having to ‘look’ at it.
“Every image or video leaves a digital fingerprint behind, and by tracking those that are known to be illegal police can spot new occurrences without searching through other content. We’ve got to be smart to tackle cyber crime – talking tough won’t cut it."