Internet companies will be required to help the Government break into phones so that it can see users' internet history under new legislation.
The Investigatory Powers Bill proposes that internet service providers should collect information on what apps and sites people are using. That will mean that the police can see when people have accessed certain sites, though will not know what activity people have done on those sites.
Domestic providers will be obliged to assist authorities in "giving effect to equipment interference" under the draft Investigatory Powers Bill.
This capability allows agencies to interfere with electronic equipment in order to obtain data such as communications from a device.
It can involve remote access to computers to covertly download the contents of a mobile phone during a search.
This is not a new power and a number of firms already assist in the activities voluntarily, officials said, but they will be legally obliged to provide assistance in future.
All police forces will be permitted to carry out equipment interference under the new regime, with a code of practice to be issued to regulate use of "more sensitive and intrusive techniques".
She said: "Never before has so much information been in the public domain about the activities of our police and security services, as well as the oversight, safeguard and authorisation arrangements which govern them.
"I am clear we need to update our legislation to ensure it is modern, fit for purpose and can respond to emerging threats as technology advances.
"There should be no area of cyberspace which is a haven for those who seek to harm us to plot, poison minds and peddle hatred under the radar.
"But I am also clear that the exercise and scope of investigatory powers should be clearly set out and subject to stringent safeguards and robust oversight."
She argued that the bill will establish "world-leading oversight to govern an investigatory powers regime which is more open and transparent than anywhere else in the world".
Additional reporting by agencies
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