David Cameron has denied that Government proposals to monitor calls, emails, texts and website visits would be a "snoopers' charter".
The Prime Minister insisted the moves were needed to keep up with changes in technology and were vital in the effort to tackle serious crime and terrorism.
Deputy Prime Minister Nick Clegg said the controversial proposals would be published in draft form for consultation and would include the "highest possible safeguards".
The Government has faced a backlash from Tory and Liberal Democrat backbenchers concerned at the erosion of civil liberties.
Both parties had previously condemned the Labour government's plans to establish a surveillance database.
Asked why the Tories appeared to have changed their position on GCHQ accessing information, Mr Cameron said: "Let's be absolutely clear, this is not what the last government proposed and we opposed.
"And let's be clear, this is not about extending the reach of the state into people's data, it's about trying to keep up with modern technology.
"But we should remember that this sort of data, used at the moment, through the proper processes, is absolutely vital in stopping serious crime and some of the most serious terrorist incidents that could kill people in our country, so it's essential we get this right.
"Yes to keeping up with modern technology. No to a snoopers' charter."
Speaking on a visit to south west London, the Prime Minister added: "This is not about giving the state access to the content of people's emails or telephone conversations, that requires a warrant and all the proper processes have to be gone through.
"An awful lot of misinformation, frankly, has been put about what's being proposed."
Liberal Democrat leader Mr Clegg said what was being discussed was a case of updating existing powers to take account of advances in technology - such as internet telephone service Skype - which he claimed criminals and terrorists could use to subvert existing surveillance laws.
Mr Clegg told BBC Radio 4's World At One: "We have to confront as a Government it is now possible to communicate with each other using different routes and we do need to update the means and powers that already exist on the statute books to reflect that change in technology.
"There will be the highest possible safeguards. What I can't do is tell you what those are in detail because the proposals have not been published yet.
"I'm absolutely clear... we will not return to the bad old days under the Labour Party.
"This will be an open, consultative and properly scrutinised process."
But Labour leader Ed Miliband said the Government had "spectacularly mishandled" a sensitive issue.
He said: "It is unclear what they are proposing. It is unclear what it means for people. It is always going to lead to fears about general browsing of people's emails unless they are clear about their proposals, clear about what they would mean, clear about how they are changing the law."
Liberal Democrat MP Julian Huppert, who sits on the Home Affairs Select Committee, warned there were real questions to answer about the technological capability of any new system.
He told the World at One: "Proposals to read exactly what we write in an email would, I think, be totally unacceptable.
"I think from a principle level I'm not wild about phone records being kept but it's hard to see whether there is a difference between a phone record and a Skype record.
"But there are key problems from both a technological and a cost point of view."
Home Secretary Theresa May will face questions about the plans when she appears in front of the Home Affairs Select Committee on April 24.
Writing in The Sun she said the proposed law change, which will mean internet companies are instructed to install hardware tracking telephone and website traffic, would help police stay one step ahead of criminals.
She added: "We cannot afford to lose this vital law enforcement tool. But currently online communication by criminals can't always be tracked. That's why the Government is proposing to help the police stay one step ahead of the criminals.
"There are no plans for any big Government database. No one is going to be looking through ordinary people's emails or Facebook posts. Only suspected terrorists, paedophiles or serious criminals will be investigated."