Britain's eavesdropping agency GCHQ worked with US intelligence agencies to break into the global communication links of internet giants Yahoo and Google to collect personal data, it was reported.
Documents leaked by American whistle-blower Edward Snowden suggest information from user accounts was collected "at will" under a system codenamed "Muscular", the Washington Post said.
Information handed over by the former National Security Agency (NSA) contractor previously revealed the existence of the Prism programme under which communication data was sought from internet firms.
But the newspaper said that despite having that access, the agencies were also copying "entire data flows" via the fibre-optic cables carrying information between the two firms' data centres.
It suggested up to 181,280,466 records a month were being sent back to NSA headquarters - including who sent and received emails - in a process carried out overseas that would be illegal in the US.
Google said it was "troubled by allegations of the government intercepting traffic between our data centers, and we are not aware of this activity."
"We have long been concerned about the possibility of this kind of snooping, which is why we continue to extend encryption across more and more Google services and links," the company said.
Yahoo said it had not given access to any government agencies and had "strict controls" in place.
Under the £1 billion Tempora operation, GCHQ is understood to have secretly accessed fibre-optic cables carrying huge amounts of internet and communications data and shared it with the NSA.
A "damaging public debate" over GCHQ's spying activities could lead to legal challenges against its mass-surveillance programmes, the intelligence agency fears.
Prime Minister David Cameron mounted a staunch defence of the intelligence agencies this week following diplomatic rifts over spying by the United States on its European allies.
He also denounced Snowden's leaks and "what some newspapers are assisting him in doing" - warning that they were making it more difficult to keep people safe.
Downing Street said it did not comment on intelligence matters.
"Our intelligence services do vital work to keep us safe," a Number 10 spokeswoman added.