Information about every call from the UK's mobile phones and landlines will have to be logged by operators for one year under an extension to the Regulation of Investigatory Powers Act 2000.
The Home Office has stressed that only information about the calls and texts, including the location in the case of mobile calls, will be logged and not the content.
The information will be made available to 652 public bodies, including the Food Standards Agency, district and county councils and the Gaming Board, on request to a senior police official.
Tony McNulty, the UK's minister for security and counter-terrorism, explained in an interview with BBC Radio 4 that the data will be made available on three distinct levels.
"Say some old lady has got difficulties with someone who's repaired the gas in her house and has a mobile phone [number] for somebody who's clearly dodgy. The local authorities can just get the subscriber information next to that number," he said.
"The second level of data is not simply the subscriber, but the calls made by that phone.
"And the third level, which is purely for the security forces and police, is not just the subscriber information and the calls made, but the calls coming in and location data about where the calls are made from."
The new regulations have come under heavy fire from opposition parties and civil liberties groups.
"Once again this government has been caught red handed creating new surveillance state powers with no meaningful public or parliamentary debate," said Nick Clegg, home affairs spokesman for the Liberal Democrats.
A spokesman for civil liberties group Liberty said: "A recent poll suggests that 75 per cent believe we live in a surveillance society. It's high time the authorities did something to win back our trust."
A Home Office spokesman defended the move, maintaining that it followed a directive from the European Union.
''We are not intruding into people's private lives," he said. "Imposing requirements on phone service providers to retain data is part of the difficult balance between protecting people from terrorism and serious crime, and respecting human rights."
The new law was signed off by Home Secretary Jacqui Smith in July.
