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The proposals, which are designed to harmonise data retention practices across the EU, will need the backing of all 25 member states. However some states believe they have been watered down in response to pressure from telecommunications firms and civil rights groups.

Under the EC proposals telecoms operators will be required to store data for one year and ISPs to retain it for six months. In the wake of the Madrid bombings, the EU's Council of Ministers had originally called for a three year retention period.

The new, some might say compromise, proposals have been pushed through by the UK, which currently holds the presidency of the EU. Home Secretary Charles Clarke stressed the importance of a common approach.

'Getting some kind of uniformity across Europe is important because this is such an important technique in how we solve serious crimes and in dealing with counter-terrorism,' he said.

He was backed by the Commission's

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vice president Franco Frattini.

'Counter terrorism effectively requires that we have no time to lose,' he said.

But the European Telecommunications Network Operators' Association (ETNO) described the proposals as an unsophisticated solution to a complex problem. It is also concerned about the cost, which it says may run to hundreds of millions of euros.

Much of the data that may have to be kept is currently not stored as it is not needed for billing or other commercial reasons.

'Problems arise from the fact that we will have to upgrade our network to collect data which is not currently kept for commercial purposes,' said Thierry Dieu, a spokesman for ETNO.

However the EC has called for governments to ensure that telecoms operators and ISPs are compensated.

In June the European Parliament voted against Europe-wide retention rules which it said would place an unreasonable burden on industry while infringing individuals' data privacy rights.

The proposals have also been condemned by EDRI, a pan-European organisation of 21 civil rights and privacy campaign groups.

'Human rights law matters most when governments and societies face times of crisis,' it said. 'The worst possible response would be to jeopardise those carefully wrought rights by a panic-inspired response. We consider the draft framework decision on ubiquitous data retention a serious violation of the right to a private life and a serious endangerment to freedom of speech.'