It will hold the political views of millions of voters as well as the political histories of every Tory candidate in the forthcoming general election.
The system, named Excalibur, has been installed in Labour's new pounds 2m Millbank complex, at the heart of Westminster, and is filing the speeches, soundbites and gaffes of Government ministers, Conservative MPs and parliamentary candidates, and even some Tory councillors, in order to embarrass the Conservatives in the election campaign.
It will also hold the voting records and intentions of millions of individual voters in marginal constituencies, compiled from canvass returns.
Liberty, the civil liberties pressure group, is unhappy at the creation of a national database of electors' political views. Spokeswoman Atiya Lockwood said: "It raises issues because there is no right to privacy. What sort of controls are in place to protect confidentiality, who has access, and what other information is on there?"
Phil Jones, an assistant Data Protection registrar, confirmed that the computer records were probably legal, as the Labour Party is registered under the Data Protection Act. He said that if electors ask what will happen to their comments, they must be told the truth.
There are also security concerns. Max Hunt, a computer expert who has helped to compile the returns in the marginal Loughborough seat, said: "The security implications are severe. It uses volunteers, who are often untrained, which provides a weak link in the security."
Officially, the Labour Party insists that the Excalibur system is to be used for rebuttal, to avoid the repeat of the damage caused in the last general election over Labour's tax plans.
But Labour constituency parties have been written to, and asked to monitor the comments of local Conservative Party officials, particularly local MPs, for inclusion on the national database. A spokesman for the Labour Party said: "We don't discuss the mechanics of our campaign," but denied they were running a dirty-tricks war.
"We certainly expect the Tories to engage in one, but we are not engaged in one," the spokesman added. "Any database source will be based on public comments, not unsubstantiated rumours."
Some Labour activists themselves are worried, however, at the potential applications of Excalibur. One senior Labour councillor expressed the worry that the system might be used to vet applicants for council jobs, to prevent Tory activists being employed in Labour-controlled councils.
The database is the most advanced ever seen in Britain. "We are strongly of the view that we are not doing anything illegal or underhand," said the Labour Party's spokesman. "I can't say that every voter will be happy; some won't be. We are just applying something nationally that we have been doing locally for a decade." He added that the records will not be sold for commercial use.Reuse content