UK spy agency GCHQ has been accused of intercepting and storing webcam images of millions of Yahoo users.
The Internet giant labelled the allegations in the Guardian newspaper’s latest report on files leaked by US whistleblower Edward Snowden as a "whole new level of violation".
The report claims a surveillance programme codenamed Optic Nerve, operated by GCHQ with aid from America's National Security Agency (NSA), saved still images of Yahoo webcam chats in bulk to agency databases, regardless of whether individual users were suspected of wrongdoing.
A Yahoo spokeswoman said: "We were not aware of, nor would we condone, this reported activity. This report, if true, represents a whole new level of violation of our users' privacy that is completely unacceptable and we strongly call on the world's governments to reform surveillance law consistent with the principles we outlined in December.
"We are committed to preserving our users' trust and security and continue our efforts to expand encryption across all of our services."
GCHQ declined to comment on the claims.
GCHQ files, dating between 2008 and 2010, reportedly show in one six-month period alone, the agency collected webcam imagery – including substantial quantities of sexually explicit communications – from more than 1.8 million Yahoo user accounts globally.
Optic Nerve began as a prototype in 2008 and was still active in 2012. It was used for experiments in automated facial recognition, to monitor GCHQ's existing targets, and to discover new targets of interest, the newspaper reported.
Rather than collecting webcam chats in their entirety, the program saved one image every five minutes from the users' feeds, the Guardian said, while sexually explicit webcam material proved to be a particular problem for GCHQ.
A previously top-secret document, found among 58,000 files taken by Snowden, said: "Unfortunately... it would appear that a surprising number of people use webcam conversations to show intimate parts of their body to the other person.
"Also, the fact that the Yahoo software allows more than one person to view a webcam stream without necessarily sending a reciprocal stream means that it appears sometimes to be used for broadcasting pornography."
Between 3 per cent and 11 per cent of the Yahoo webcam imagery harvested by GCHQ contains "undesirable nudity", the document reportedly said.
Reacting to the claims, MP David Davis said: "We now know that millions of Yahoo account holders were filmed without their knowledge through their webcams, the images of which were subsequently stored by GCHQ and the NSA. This is, frankly, creepy.
"It is perfectly proper for our intelligence agencies to use any and all means to target people for whom there are reasonable grounds for suspicion of terrorism, kidnapping and other serious crimes. It is entirely improper to extend such intrusive surveillance on a blanket scale to ordinary citizens."
Nick Pickles, director of civil liberties campaigner group Big Brother Watch, said: "Secretly intercepting and taking photographs from millions of people's webcam chats is as creepy as it gets. We have CCTV on our streets and now we have GCHQ in our homes.
"It is right that the security services can target people and tap their communications but they should not be doing it to millions of people. This is an indiscriminate and intimate intrusion on people's privacy.
"It is becoming increasingly obvious how badly the law has failed to keep pace with technology and how urgently we need a comprehensive review of surveillance law and oversight structures.
"As more people buy technology with built-in cameras, from Xbox Kinect to laptops and smart TVs, we need to be sure that the law does not allow for them to be routinely accessed when there is no suspicion of any wrongdoing. Orwell's '1984' was supposed to be a warning, not an instruction manual."