Two MP's have won a High court battle over laws which they say allow the police and security services to "spy on citizens" without appropriate safeguards.
The Government said it disagreed with the courts decision and would seek to appeal.
The two Mps, David Davis and Tom Watson, argued the Data Retention and investigatory Powers Act were incompatible with human rights.
This would have allowed security agencies to gather phone and internet data without gaining clearance from officials or higher ranking individuals.
Two High Court judges have now found that the act is "incosistent with EU law".
The ruling simply cancels the new legislation, although it has been suspended until next march.