Communications firms will be legally required to help spies hack into suspects' smartphones and computers under new snooping laws unveiled today.
Domestic providers will be obliged to assist intelligence agencies when they are given warrants to carry out equipment interference.
The technique allows authorities to interfere with electronic devices in order to obtain data and can range from remotely accessing a computer to covertly downloading the contents of a mobile phone.
It is seen as an increasingly crucial tool as advanced encryption makes intercepting targets' communications more difficult.
Last week the head of MI5, Andrew Parker, highlighted the importance of the ability to mount IT attacks against terrorist networks.
This is not a new power and a number of firms already assist in the activities voluntarily, officials said.
The new obligation was contained in landmark proposals for bringing surveillance tactics used by police and intelligence agencies in the digital age under one legal umbrella.
Home Secretary Theresa May described the unveiling of the draft Investigatory Powers Bill as "a decisive moment", while it was criticised by campaigners as a "breathtaking attack" on civil liberties.
It will see around seven High Court judges appointed as judicial commissioners and given unprecedented powers to veto warrants for more intrusive operations such as interception of the content of communications, bulk data collection and equipment interference
Under the "double lock" approval system, the Home Secretary will continue to give initial authorisation.
But now judges will have to approve warrants, or they will be blocked. In urgent circumstances, such as where there is a threat to life, Mrs May would be able to issue a warrant without judicial authority. The commissioners will be required to be available around the clock.
A requirement for internet firms to store records of data relating to people's web and social media use for up to a year was also confirmed.
Internet connection records (ICRs) are described as the online equivalent of a phone bill, with officials insisting they will detail services a device connects to but not their full browsing history.
They will allow police to see, for example, that someone has visited Google.co.uk, but not what searches they have made.
ICRs are seen as crucial to restoring capabilities that have been lost as communication shifts online. Hundreds of paedophiles are believed to have potentially escaped justice because the authorities were unable to access the details.
It was also disclosed for the first time that successive governments have issued secret directions to communications service providers to allow intelligence services to collect bulk communications data under the Telecommunications Act 1984.
This technique involves large volumes of information being amassed in order to identify "subjects of interest" in the UK and overseas and will be explicitly set out in the new Bill.
It has helped agencies to thwart a number of terrorist attacks in the UK, including a plot to strike the London Stock Exchange in 2010.
Launching the new Bill, the Home Secretary said: "There should be no area of cyberspace which is a haven for those who seek to harm us to plot, poison minds and peddle hatred under the radar."
She argued that the new regime will establish "world-leading oversight to govern an investigatory powers regime which is more open and transparent than anywhere else in the world".
The plans do not include any move to ban or restrict encryption, despite warnings that security services face being locked out of some parts of cyberspace because of advanced security measures.
Councils will be banned from accessing ICRs, while a new offence of "knowingly or recklessly obtaining communications data" will be created to guard against abuses of surveillance powers, with those convicted facing up to two years in prison.
The overall cost to taxpayers of implementing the Bill is estimated to amount to around £247 million over the next 10 years.