Speaking to BBC Breakfast, Home Secretary Theresa May said the change was needed to keep up with how criminals were using new technology, and the records will include activity on social network sites, webmail, internet phone calls and online gaming.
She said that at the moment, police are able to access telephone data, but communications have moved on and surveillance needed to be updated too.
May told BBC Breakfast: "It's not about the content, it's not about reading people's emails or listening to their telephone calls. This is purely about the who, when and where [in relation to] these communications and it's about ensuring we catch criminals and stop terrorists.”
Asked if police would need a warrant to access data, May said: “It will be a new bill that will set out what the police will be able to do, they will not be able to access content, it is only senior officers accessing this, they can only do this when they are investigating a criminal when it is necessary in an investigation to have access to this.
“The data will be held by the communications service providers. This is not about creating a big government database, that is not what is going to be done as a result of this bill – what is going to happen is the communications service providers will be asked to hold this data and the access arrangements will be as they have been.
“The police will have to make requests to access the data, the technology will ensure that any extraneous data is filtered out so those who are asking only get what they are asking for.”
The draft surveillance bill was detailed in last month's Queen's speech, with Her Majesty saying that the Government "intends to bring forward measures to maintain the ability of the law enforcement and intelligence agencies to access vital communications data under strict safeguards to protect the public, subject to scrutiny of draft clauses".
The announcement of government plans to monitor and store the calls, emails, texts and website visits of everyone in the UK caused outrage, while details were unclear. Information commissioner Christopher Graham said at the time that he expected the surveillance plans to stand out in the Queen's Speech.
BBC News reported that the new proposals would require UK communications companies to keep details of a much wider range of data including use of social network sites, webmail, voice calls over the internet and gaming. Websites visited could be recorded, although pages within sites would not be.
A statement by the ICO said: “Ultimately, it is for Parliament to determine whether or not the proposals contained in the draft bill are a proportionate response to the perceived problem of communications data capability. The information commissioner will contribute to the Joint Committee's consideration of the draft bill and, in particular, the adequacy of the proposed safeguards and limitations.
“If the information commissioner is to be in a position to ensure compliance with the Data Protection Act, in respect of security of retained personal information and its destruction after 12 months, the ICO will need appropriately enhanced powers and the necessary additional resources.”
Jim Killock, executive director of the Open Rights Group, said: “The government's notes confirm that this is exactly what we expected: black boxes to intercept people's traffic data, and poorly supervised police powers to get access to it.
“Bluntly these are as dangerous as we expected, and represent unprecedented surveillance powers in the democratic world. China and Iran will be delighted.”