The radical new system, which has outraged civil liberties groups, uses mobile phone masts to allow security authorities to watch vehicles and individuals 'in real time' almost anywhere in Britain.

The technology 'sees' the shapes made when radio waves emitted by mobile phone masts meet an obstruction. Signals bounced back by immobile objects, such as walls or trees, are filtered out by the receiver. This allows anything moving, such as cars or people, to be tracked. Previously, radar needed massive fixed equipment to work and transmissions from mobile phone masts were thought too weak to be useful.

The system works wherever a mobile phone can pick up a signal. By using receivers attached to mobile phone masts, users of the new technology could focus in on areas hundreds of miles away and bring up a display showing any moving vehicles and people.

An individual with one type of receiver, a portable unit little bigger than a laptop computer, could even use it as a 'personal radar' covering the area around the user. Researchers are working to give the new equipment 'X-ray vision' - the capability to 'see' through walls and look into people's homes.

Ministry of Defence officials are hoping to introduce the system as soon as resources allow. Police and security services are known to be interested in a variety of possible surveillance applications. The researchers themselves say the system, known as Celldar, is aimed at anti-terrorism defence, security and road traffic management.

However civil liberties groups have been swift to condemn the plan.

'It's an appalling idea,' said Simon Davies, director of Privacy International. 'The Government is just capitalising on current public fears over security to intoduce new systems that are neither desirable nor necessary.'

The system, used alongside technology which allows individuals to be identified by their mobile phone handsets, will mewan that individuals can be located and their movements watched on a screen from hundreds of miles away.

Prototypes have been effective over 50 to 100 metres but the developers are confident that range can be extended.

After a series of meetings with Roke Manor, a private research company in Romsey, Hants, MoD officials have started funding the multi-million pound project. Reports of the meetings are 'classified'.

Whitehall officials involved in radar confirmed that the MoD was 'very interested' last week. 'It's all about resources now,' said one.

Private security specialists have also welcomed the new technology.

'It will be enormously useful,' the director of one private security firm said. 'Instead of setting up expensive and cumbersome surveillance equipment, police or the security services could start work quickly and easily almost anywhere.

'For tracking a suspect, preventing a potential crime or a terrorist strike or simply locating people [the system] has enormous advantages.'

It is likely that the technology would be used at first to protect sensitive installations such as ports and airfields.

The perimeter of a nuclear power station or an RAF base could be watched without having a bank of CCTV screens and dozens of expensive cameras.

If the radar picked up movement then a single camera could be focused on a specific area.

Celldar could also monitor roads when poor visibility due to bad weather rendered cameras useless.

'The equipment could pick up traffic flows towards an accident site and the details of a crash; who is where and so on,' said Peter Lloyd of Roke Manor.

Lloyd also outlined a number of military applications for the technology. Individual armoured vehicles or even soldiers could carry the detectors which could tell them where enemy troops were.

Security specialists point out how useful personal radars would be in siege situations. However there are significant concerns that the technology might be abused by authorities or fall into the wrong hands.

'Like all instrusive surveillance, we need to be sure that it is properly regulated, preferably by the judiciary,' said Roger Bingham of Liberty.

Bingham expressed concerns that the new equipment, which would be virtually undetectable, could be used by private detectives or others for personal or commercial gain.

Modern technology has brought massive opportunities for wider surveillance. Since the 11 September terrorist attacks on Washington and New York, the government has been pushing through a package of anti-terrorism legislation which targets electronic communications.