Councils, police and intelligence services are tapping and intercepting the phone calls, emails and letters of hundreds of thousands of people every year, an official report said.
Those being bugged include people suspected of illegal fly-tipping as councils use little known powers to carry out increasingly sophisticated surveillance to catch offenders.
The report, by Sir Paul Kennedy, the Interception of Communications Commissioner, has fuelled fears that Britain is becoming a state where private communications are routinely monitored.
It also found that more than 1,000 of the bugging operations were flawed. In some cases, the phones of innocent people were tapped simply because of administrative errors.
David Winnick, a Labour member of the Commons home affairs committee, said greater legal protection was needed to prevent abuse of surveillance powers. Britain already has more CCTV cameras per person than any other country in the world.
He said: “Most of these operations are needed and done for good reasons, but the numbers do raise concerns about the safeguards we have put in place to protect people from constant intrusion.”
Referring to George Orwell’s vision of a surveillance state, Mr Winnick added: “To walk blindfolded into 1984 is not anything that anybody in their right mind would want.”
Michael Parker of NO2ID, which campaigns against ID cards, said the figures showed the state’s desire to gather more information about people. “We are living in a surveillance state.”
The report shows that in the last nine months of 2006, there were 253,557 applications to intercept private communications under surveillance laws. It is understood that most were approved.
In that period 122 local authorities sought to obtain people’s private communications in more than 1,600 cases.
Councils are among more than 600 public bodies with the power to monitor people’s private communications.
Senior council officers are given the power to authorise surveillance in order to catch fly-tippers, benefit fraudsters and rogue traders. However, intelligence agencies must seek the permission of ministers while police need approval from chief constables.
Eric Pickles, the Conservative local government spokesman, said the use of surveillance powers against suspected fly-tippers was “completely over the top.”
Sir Paul, a senior judge with access to secret intelligence material, also reported 1,088 incidents where public bodies broke the rules on surveillance operations.
His report covers interception activities over a total of 264 days, during which time new applications for interception were made at a rate of 960 each day.
This did not include warrants personally issued by the Foreign Secretary and the Northern Ireland Secretary – thought to be several thousand – which are kept secret.
Each application under the Regulation of Investigatory Powers Act can cover several means of communication used by one named person, or all communications to and from a named building.
The Local Government Association defended the use of the powers against people “ruining the countryside or trying to take the taxpayer for a ride”.
Eric Metcalfe, a barrister who advises Justice, a civil rights group, called the findings “disturbing”. He added: “Putting the Home Secretary in charge of authorising interceptions is like putting the fox in charge of the henhouse.”
Shami Chakrabarti, the director of Liberty, said: “It beggars belief that in a nine-month period, based on these figures, the entire City of Westminster could have had their phones tapped – yet Britain remains one of the few Western countries that won’t allow this evidence to be used in court … to prosecute criminals and terrorists.”
But Sir Paul confirmed that MI5 and other intelligence agencies remain opposed to any change in the law.