Under Government plans to monitor internet traffic, raw data would be collected and stored by the black boxes before being transferred to a giant central database.
The vision was outlined at a meeting between officials from the Home Office and Internet Service Providers earlier this week.
It is further evidence of the Government"s desire to have the capability to vet every telephone call, email and internet visit made in the UK, which has already provoked an outcry.
Richard Thomas, the Information Commissioner, has described it as a "step too far".
The proposal is expected to be put out to consultation as part of the new Communications Data Bill early next year.
At Monday"s meeting in London representatives from BT, AOL Europe, O2 and BSkyB were given a presentation of the issues and the technology surrounding the Government"s Interception Modernisation Programme (IMP), the name given by the Home Office to the database proposal.
They were told that the security and intelligence agencies wanted to use the stored data to help fight serious crime and terrorism.
Officials tried to reassure the industry by suggesting that many smaller ISPs would be unaffected by the "black boxes" as these would be installed upstream on the network and hinted that all costs would be met by the Government.
One delegate at the meeting told the Independent: "They said they only wanted to return to a position they were in before the emergence of internet communication, when they were able to monitor all correspondence with a police suspect. The difference here is they will be in a much better position to spy on many more people on the basis of their internet behaviour. Also there"s a grey area between what is content and what is traffic. Is what is said in a chat room content or just traffic?"
Ministers have said plans for the database have not been confirmed, and that it is not their intention to introduce monitoring or storage equipment that will check or hold the content of emails or phonecalls on the traffic.
A spokesman for the Home Office said: "We are public about the IMP, but we are still working out the detail. There will a consultation on the Communications Data Bill early next year."