A new law swept through Congress by the US government before the summer recess is to give American security agencies unprecedented powers to spy on British citizens without a warrant.

The Foreign Intelligence Surveillance Act was approved by Congress earlier this month to help the National Security Agency in the fight against terrorism. But it has now emerged that the bill gives the security services powers to intercept all telephone calls, internet traffic and emails made by British citizens across US-based networks.

As much of the world's telecoms networks and internet infrastructure runs through the US, the new act will give the security services huge scope for monitoring and intercepting Britons' private communications, as well as those of other foreign citizens. The new act has led to fears it will see a huge increase in the number of British citizens being extradited to the US.

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'Just because it happens to pass through the US they claim they can do whatever they want,' said Tony Bunyan, director of Statewatch, the civil rights group that campaigns against state surveillance. 'Where is the EU saying, "What's going on here, we've got to protect the rights of our citizens?"'

The Dutch Liberal Democrat MEP Sophie in 't Veld has tabled a series of questions demanding answers from the EU parliament. In a statement to European politicians, In 't Veld warns the US law will 'directly apply to EU citizens and constitutes a major violation of privacy and civil liberties'.

The law has prompted a furore in the US, where it was opposed by Democrats Hillary Clinton and Barack Obama. But other countries seem ignorant of its consequences. 'There's been a lot of upheaval in Congress about this new act over fears Bush will use it to eavesdrop on US citizens,' In 't Veld said. 'But it can and will be used for the communications of Europeans.'

She pointed out many companies and organisations are based in the US and that the new law will give the US powers to monitor their communications. 'For example, I would like to know what sort of communications go via the UN,' In 't Veld said.

Concern over US powers to monitor foreign citizens is growing. European privacy watchdogs have expressed fears that the US authorities are to be handed powers to check the personal details of travellers entering America and store them on databases alongside details such as their sexuality and religious beliefs for up to 15 years. The watchdogs, including the Information Commissioner of England and Wales, Richard Thomas, have been scathing in their criticism of the European Commission for granting the US its demand for the new powers.

In a coded statement the Information Commissioner's office yesterday acknowledged concerns that the privacy of some four million Britons who travel to the US each year is at risk because of the new powers.

'We will continue to work alongside our European data protection colleagues to try to ensure that airline passengers' details are protected by the appropriate data protection safeguards,' a spokeswoman told The Observer.