Under the proposal, those purchasing cell phones would have to present a passport or some other form of identification for inclusion into a government database, The Sunday Times of London reported, citing unnamed sources.

The newspaper's sources say the effort by the Government Communications Headquarters is meant to monitor the owners of Britain's estimated 40 million prepaid cell phones, which can now be purchased with cash without giving names or credit card numbers. Such "pay-as-you-go" phones are popular with criminals and terrorists because they provide anonymity, The Times reported.

But privacy advocates are worried the proposal is another step on the road to a "surveillance society." Simon Davies of Privacy International told the newspaper he has heard that several cell phone makers have already talked to government officials about the proposed database.

The cell phone moves would be part of a larger, $1.7 billion pilot communications database effort to install thousands of "black boxes" on telephone lines provided by Vodafone and British Telecom, The Times said.