The government says it will redraft a controversial bill giving "sweeping powers" to police over personal data, following criticism from Nick Clegg and a committee of MPs.
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Mr Clegg's said the Home Office needs to "go back to the drawing board" with the draft communications bill, which needs "a fundamental rethink". The government responded by saying it would look at how it could redraft the bill.
Mr Clegg said ministers must take account of the committee's findings and that the bill - dubbed a "snooper's charter" by critics - could not proceed in its current form.
"I believe the coalition government needs to have a fundamental rethink about this legislation. We cannot proceed with this bill and we have to go back to the drawing board," he said.
"We need to reflect properly on the criticisms that the committee have made, while also consulting much more widely with business and other interested groups."
His comments follow a report by the committee which is scrutinising the draft bill. The report criticised the government for using "fanciful and misleading" figures to support its case for the bill, and said that powers the bill would give to the home secretary are too wide.
Committee chairman Lord Blencathra said: "There is a fine but crucial line between allowing our law enforcement and security agencies' access to the information they need to protect the country, and allowing our citizens to go about their daily business without a fear, however unjustified, that the state is monitoring their every move.
"Whilst the joint committee realise that there are specific data types which are not currently available, and which would aid the work of law enforcement bodies and the security services, we are very concerned at how wide the scope of the bill is in its current form."
The government said it would take the committee's comments into account, and would look at how it could redraft the bill.
"We understand that this is a controversial subject," Mr Cameron's official spokesperson told a Westminster press briefing. "That is why the government took the decision to subject the bill to pre-legislative scrutiny.
"The committee has come back with a series of issues and, as the Home Office has been making clear, we accept the substance of the committee's criticisms and we will look at how we can redraft the legislation to take account of those."
The committee said under the draft bill, the home secretary would be given "sweeping powers to issue secret notices" ordering communications companies to disclose "potentially limitless categories of data".
These secret notices are refered to in "clause one" of the draft bill, the central clause to the legislation. The clause allows that, by a secret order from the home secretary, a telecommunications operator would have to make available all "necessary" data.
But the committee took issue with how "necessary" is defined and the fact that the Home Office had not shown the committee what an order would look like.
The Home Office argues that it needs clause one to be wide-reaching because, as the committee report says, "there may be other data types that emerge from time to time."
However, the committee said it did not accept this as "a good reason to grant the secretary of state such wide powers now."
Lord Blencathra added: "The breadth of the draft bill as it stands appears to be overkill and is much wider than the specific needs identified by the law enforcement agencies.
"We urge the government to reconsider its zeal to future-proof legislation and concentrate on getting the immediate necessities right."