Telecommunications industry experts and the pressure group Liberty fear the top-secret US listening-post on the edge of moorland six miles west of Harrogate, is being used by Britain's intelligence agencies and police to avoid the requirement to obtain Home Office warrants authorising tapping.
A university computer lecturer who has made a study of electronic eavesdropping told the Independent on Sunday he understood that the 1,760 staff at the heavily-guarded base were used regularly to tap phones in this country. He said: "If the security service wants to tap your phone and wants nobody to know, there are two ways they can do it: illegally - or, entirely above board, ask US personnel at Menwith Hill to do it."
Under US law, the phone-tapping of foreign nationals in a foreign country does not require any licence. Even though it is on British soil, Menwith Hill is US-owned and regarded by the US government as under its jursidiction.
Liberty said it had been concerned for some time that "a US base is spying on British citizens and that spying is unregulated by British law".
John Wadham, its director, accused the Government of "turning a blind eye to what is going on". Menwith Hill, he claimed, was a violation of Article 8 of the European Convention on Human Rights, preserving the privacy of the individual. Liberty had raised one case with the authorities where they suspected a British citizen had been under surveillance from Menwith Hill but the complaint had been rejected.
Liberty is so concerned that it is prepared to go to the European Court of Human Rights. Geoff Hoon, Labour MP and telecommunications spokesman, said it was "worrying if Menwith Hill is behaving in this way".
As well as the American staff, mainly technical experts, about 50 employees from GCHQ in Cheltenham are there on secondment. If they are involved in tapping phones in this country without a warrant, it is possible they could be breaking the law.
Labour is calling for Menwith Hill's status to be clarified and for the station to be properly regulated. David Bowe, Labour MEP, says the base has gone far beyond its original remit as a purely defence establishment.
The biggest listening post outside the US, it has been the subject of a pounds 6bn investment in recent years, much of it on the 22 "giant golf balls" that dominate the Yorkshire skyline. Known under its US National Security Agency code as F83, the 550-acre site has been in US ownership since the Fifties.
This year it was renamed RAF Menwith Hill and the Union Jack raised alongside the Stars and Stripes. Mr Bowe, MEP for nearby Cleveland and Richmond, says this is designed to mislead. "My information is that the RAF representation on the base amounts to one token squadron leader. The name change was presumably decided to make the whole site look more benign and acceptable."
Annie Rainbow of the Campaign for Accountability of US Bases said: "Even those with the most limited knowledge of what goes on at Menwith Hill know it is not an RAF base. It is run by the NSA and they are totally unaccountable to British law."
Soon after Menwith Hill was renamed, peace campaigners Anne Lee and Helen John climbed the fences and gates and went to the home of the base commander. Ministry of Defence police arrived and arrested them. Harrogate magistrates recently gave each a conditional discharge.
Ms Lee, who is part of a women's peace camp outside the base, said last week: "We have given notice of appeal and intend to take this matter to the Crown Court. What goes on at Menwith Hill violates the British Interception of Communications Act 1985. The national security argument is just a catch-all."
As well as the fear over phone-tapping is a worry that the base is used to gain commercial advantage over European commercial rivals. The American press has reported how information passed to US companies by the NSA allowed them to steal a march on European firms to win a huge Saudi Arabian commercial airliner order.
US trade negotiators were privy to the secret strategies of the European and Japanese negotiators in the 1993 Gatt trade talks, thanks to the NSA and, it is believed, Menwith Hill
The antennae at the base - the "golf balls" hide enormous satellite dishes - are also thought to have played a role in monitoring the recent G7 talks in Lyons and sending coded conversations between ministers from the world's leading economic nations and their home governments to NSA headquarters in Maryland to be deciphered.
Japan, France and Germany in particular have complained about US eavesdropping, much of it from Yorkshire.
Howard Teicher, who sat on the US National Security Council, has said the word "Tornado", as in the British-built aircraft, was on NSA's "watch list." Any telecommunications traffic relating to possible Tornado orders from Saudi Arabia, for example, using the word would be picked up by Menwith Hill, letting the US know how the sales negotiations were progressing.
When General Sir Michael Rose was the United Nations commander in Sarajevo, his phone calls are believed to have been intercepted by Menwith Hill and relayed back to the NSA.
Earlier this year, Nicholas Soames, the armed forces minister, assured Mr Bowe that Menwith Hill operated "with the full knowledge and consent of Her Majesty's Government" and that "we are aware of all facets of operations. I can assure you that no activity considered inimical to British interests is, or would be, permitted at Menwith Hill".