Powers allowing the security services to hack smartphones and computers will be included in new draft laws, according to reports.
The Times said MI5, MI6 and GCHQ would be granted a range of electronic surveillance capabilities under the Government's Investigatory Powers Bill.
Privacy campaigners have warned against increasing surveillance powers, while the Government and senior intelligence service figures have stressed the need for monitoring, citing the threat from Islamist extremists.
The paper said the hacking powers outlined in the new Bill, which could be presented next month, were not included in the Communications Data Bill, which was dubbed the "snoopers' charter" and blocked by the Liberal Democrats in coalition.
The Government will seek to clarify the security services' ability to interfere with "property" under the Intelligence Services Act 1994 as police and spying agencies face increasing difficulty in capturing encrypted data, the Times added.
Peter Sommer, a digital evidence expert, told the paper: "Increasingly, (intelligence agents) can't read communications sent over the internet because of encryption, so their ability to get information from interception is diminishing. The best way around this is to get inside someone's computer."
It comes after US whistleblower Edward Snowden claimed British spies had the ability to turn people's mobile phones off and on and switch on the handset microphone on to listen to what is happening around them.
The Home Secretary this week confirmed a form of the Wilson Doctrine, which prevents the interception of politicians' communications except for national security reasons, will also be included in the Bill after a court ruled it had no legal basis.
Any new laws will need to be in place by December 2016 when temporary surveillance powers passed by the coalition government expire, Theresa May told MPs in June.
An intelligence source said: "These are not new powers. The Intelligence Services Act 1994 provides the legal basis for equipment interference.
"Furthermore, the Government published a code of practice for equipment interference in February 2015."