The UK Government's intelligence arm GCHQ is paid £100 million by the US Government to help fund intelligence gathering.
According to a report by the Telegraph, the money was paid across three years for a range of projects and resulted in GCHQ spying on behalf of America, according to leaked documents.
In documents leaked by Edward Snowden, it claimed that the NSA paid GCHQ £22.9 million in 2009, £39.9 million in 2010 and £34.7 million in 2011/12. This included £17.2 million for the “Mastering the Internet” project, which gathered raw information from the web to be analysed.
A Cabinet Office spokesman said: “In a 60-year alliance it is entirely unsurprising that there are joint projects in which resources and expertise are pooled, but the benefits flow in both directions.”
Foreign Secretary William Hague, visiting GCHQ, said that staff acted “in full accordance with our laws and values”.
He said: “It's easy to forget that a safe and secure Olympics didn't happen last year by accident. Our intelligence, security and law enforcement community made a decisive difference and continues to do so. GCHQ's world-class capabilities and tradecraft are fundamental to this.”
Hague welcomed the findings of the Intelligence and Security committee from July, when it cleared GCHQ of wrongdoing around the Prism software. The ISC report said that allegations about GCHQ circumventing UK law by using Prism were “unfounded” and that it was satisfied that intelligence sought from the US conformed with GCHQ's statutory duties.