A senior intelligence official has admitted that the US government used a secret surveillance programme to access the servers of nine internet companies, including Google, Apple and Facebook, in order to spy on foreigners overseas.
In a statement issued anonymously last night the existence of the programme, known as PRISM, was confirmed.
It was also suggested the operation was authorised as part of the Foreign Intelligence Surveillance Act, which only targets foreigners overseas.
Responding to coverage of the surveillance revealed in articles published by The Guardian and theWashington Post the statement refers to the operation as the "collection of communications pursuant to Section 702 of the Foreign Intelligence Surveillance Act."
It goes on to say that: "Section 702 is a provision of FISA that is designed to facilitate the acquisition of foreign intelligence information concerning non-U.S. persons located outside the United States."
"It cannot be used to intentionally target any US citizen, any other US person, or anyone located within the United States."
Yesterday spy chief James Clapper condemned the leak of details about the programme saying it was “reprehensible and risks important protections for the security of Americans”.
The new revelations follow outrage yesterday over the National Security Agency's secret collection of telephone records from millions of Americans.
The White House spent much of yesterday defending the secret collection of telephone records from millions of Americans as a "critical tool" for preventing attacks, as critics called the program a heavy-handed move that raised new questions about the extent of the US government's spying on its citizens.
A report in the Washington Post has raised further questions over the extent of the monitoring after it was revealed that the NSA and the FBI are tapping directly into the central servers of nine leading internet companies including Google and Facebook.
The authorities are able to extract video and audio chats, photographs, documents, connection logs and emails from the servers as part of a programme code-named PRISM.
The details of the operation are significant because of the huge data store of intelligence likely to be contained within the servers of the world's biggest web companies.
According to the report, the intelligence agencies have access to the central servers of Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube and Apple.
A confidential slide show obtained by two newspapers appears to show the nine companies are all willing participants in the programme.
However, it was also reported that a number of the companies claimed to have no knowledge that their servers were being accessed by government agencies.
Google, Apple, Yahoo and Facebook immediately denied that the government had "direct access" to their central servers.
Microsoft said it does not voluntarily participate in any government data collection and only complies "with orders for requests about specific accounts or identifiers."
The nine companies involved between them deal with a considerable proportion of online communications worldwide.
James Clapper, the director of national intelligence, said today that the report contained "numerous inaccuracies" and accused The Guardian newspaper of giving a 'misleading impression' of how the programme had worked.
He added that he had ordered parts of the programme to be declassified so US citizens could understand "the limits of this targeted counterterrorism programme and the principles that govern its use".
Clapper indicated that Thursday's reports were indeed significant but disputed the notion that government agents could use such data without a specific investigative purpose in mind. He also said the program does not allow the government to listen in on anyone's phone calls.
"The unauthorized disclosure of information about this important and entirely legal program is reprehensible and risks important protections for the security of Americans," he said in a statement.
Republican Mike Rogers of Michigan, chairman of the House of Representatives Intelligence Committee, said the surveillance effort had stopped a "significant" attack plot within the United States, but did not give details.
"It's called protecting America," added Senator Dianne Feinstein, a California Democrat who heads the Senate Intelligence Committee.
But there also was a diverse group of Republicans and Democrats - some who knew about the program and its scope, others who apparently did not - who blasted the gathering of such a huge database of details about Americans' phone habits as an unwarranted intrusion.
"The United States should not be accumulating phone records on tens of millions of innocent Americans. That is not what democracy is about. That is not what freedom is about," said Senator Bernie Sanders, a liberal independent from Vermont.
Conservative Republican Senator Rand Paul of Kentucky called the program "an astounding assault on the Constitution" and said the Obama administration "had sunk to a new low."