Government plans to give police and intelligence services new powers to monitor email and internet use need a “fundamental rethink”, Nick Clegg says.
His comments came as a committee of MPs and peers criticised the bill’s scope.
The Home Office said the new laws were needed “without delay” to stop serious crimes such as terrorism.
BBC deputy political editor James Landale says the question of how to balance liberty and security is an old one, but one that is dividing the coalition.
Under the plans, internet service providers would have to store details of all online communication in the UK, such as the time, duration, originator and recipient of a communication and the location of the device from which it was made.
However, police would need a warrant to be able to see the content of any messages.
A report from the Joint Committee on the Draft Communications Bill accepted there was a need for new legislation to help the police fight crime and tackle security threats organised via online communications.
But it warned that ministers would be able to demand “limitless categories of data” on internet communications if the draft bill was not amended.
Right to privacy
It called for “safeguards” over the new powers to prevent abuse.
The committee also accused the government of producing estimates of the cost of implementing the bill that were not “robust” enough.
“The figure for estimated benefits is even less reliable than that for costs, and the estimated net benefit figure is fanciful and misleading,” it said.
The MPs and peers added: “We believe that the draft bill pays insufficient attention to the duty to respect the right to privacy.”
The legislation “goes much further than it need or should for the purpose of providing necessary and justifiable official access to communications data”, their report said.
Mr Clegg, the Liberal Democrat leader, said the committee had raised “a number of serious criticisms – not least on scope, proportionality, cost, checks and balances, and the need for much wider consultation”.
“It is for those reasons that I believe the coalition government needs to have a fundamental rethink about this legislation. We cannot proceed with this bill and we have to go back to the drawing board.”
But he added: “The committee did not, however, suggest that nothing needs to be done. They were very clear that there is a problem that must be addressed to give law enforcement agencies the powers they need to fight crime. I agree.
“But that must be done in a proportionate way that gets the balance between security and liberty right.”
Home Secretary Theresa May has said the plans are needed to help society fight crime and “save lives”, and that the police would be able to see the details of communications only if they had a “clear case” and investigative justification. She wants the bill in place next year.
The committee said the home secretary would be given “sweeping powers to issue secret notices to communications service providers (CSPs) requiring them to retain and disclose potentially limitless categories of data”.
But it added: “We have been told that she has no intention of using the powers in this way. Our main recommendation is therefore that her powers should be limited to those categories of data for which a case can now be made.”
If these powers needed to be enhanced in future, this should be done with “effective parliamentary scrutiny”, it said.
The Intelligence and Security Committee, a separate committee of MPs and peers that reports directly to the prime minister, said there had been a “lack of coherent communication” on the “safeguards that will be in place” under the bill.
It said it accepted there was “a serious problem that requires action”, but added Parliament and the public would require more information if they were to be convinced by the proposals.
A Home Office spokesman said: “This legislation is vital to help catch paedophiles, terrorists and other serious criminals and we are pleased both scrutiny committees have recognised the need for new laws.
“We have now considered the committees’ recommendations carefully and we will accept the substance of them all. But there can be no delay to this legislation. It is needed by law enforcement agencies now.”