Fears of state surveillance of the internet could have a "chilling effect" on the use of social media such as Facebook and Twitter, a former Whitehall intelligence chief warned.
Sir David Omand, an ex-Cabinet Office security and intelligence coordinator and former director of the GCHQ electronic eavesdropping agency, said it was essential that monitoring of social media was put on a proper legal footing.
A report by the think-tank Demos, which Sir David co-authored, said existing laws regulating the interception of communications by police and intelligence agencies needed to be overhauled to meet the complexities of social media.
While intelligence gathered from social media - which it dubbed "Socmint" - could be a vital source of information in identifying criminal activity or providing early warning of disorder, it said the public needed to be confident it was not being abused.
"Democratic legitimacy demands that where new methods of intelligence gathering and use are to be introduced they should be on a firm legal basis and rest on parliamentary and public understanding of what is involved, even if the operational details of the sources and methods used must sometimes remain secret," it said. "In respect of Socmint these conditions of democratic legitimacy are presently absent."
The report said that while the existing Regulation of Investigatory Powers Act 2000 (Ripa) was the most appropriate legislation currently available, there should be a cross-departmental review of how the law operated in future.
In particular it emphasised the need to distinguish between information which people make openly available on social media sites and that which is protected by privacy barriers, which should require a warrant issued by a minister or a judge if the authorities wish to access it.
"People now share vastly more personal information about themselves, their friends and their networks in new a varied ways: what is 'public' and what is 'private' is not always obvious and differs greatly across social media platforms and even within social media platforms," the report said. "Moreover, new and emerging technology potentially allows more invisible and widespread intrusive surveillance than ever before."
The report's publication comes against the background of intense controversy over the Government's plans to extend the monitoring of all texts, telephone calls, emails and internet traffic in the UK. Sir David said that proper regulation was essential to ensure public trust in the system.
A Home Office spokesman said: "Communications data, the who, when and where of a communication, has played a role in every major security service counter-terrorism operation over the past decade and in 95% of all serious organised crime investigations, that includes cracking down on gang crime and paedophile rings. Interception of the content of a communication is only possible with a warrant signed by the Secretary of State and we have no plans to change this."