No decision has been taken to create a huge database containing details of all phone calls, e-mails and internet use, security minister Lord West says.
The Information Commissioner has warned that such a database could be a "step too far for the British way of life".
Asked in the House of Lords about that warning, Lord West said: "It is very early days as to where we go on this."
But the switch from traditional phones meant the "entirely new" communication methods had to be assessed, he said.
There have been reports that the giant database is planned for the government's proposed Communications Data Bill.
That led Information Commissioner Richard Thomas to call in his annual report this week for a full public debate first.
Mr Thomas acknowledged that "targeted and duly authorised" interception of communications by terrorists and other suspects could be "invaluable".
But he warned that people must still "stand up" for their "fundamental liberties" and freedoms.