Britain has a Middle East-based listening post collecting emails, phone calls and web traffic on behalf of western intelligence agencies, according to reports.
The Independent newspaper said it had learned of the GCHQ-run facility and details were included in leaks made by US fugitive Edward Snowden.
But in a statement to Guardian journalist Glenn Greenwald, Mr Snowden denied being the Independent’s source – and blamed the UK Government for the leak.
Both the Foreign Office and intelligence-gathering agency GCHQ refused to comment on the report.
The Independent said the facility accesses web traffic by tapping into underwater fibre optic cables connecting the region to the internet but did not reveal its location.
It added that fear the site could be discovered was one of the reasons the Government asked the Guardian to destroy hard drives containing a copy of the Snowden files.
But Mr Snowden said: “I have never spoken with, worked with, or provided any journalistic materials to the Independent. The journalists I have worked with have, at my request, been judicious and careful in ensuring that the only things disclosed are what the public should know but that does not place any person in danger.
“People at all levels of society up to and including the president of the United States have recognised the contribution of these careful disclosures to a necessary public debate, and we are proud of this record.
“It appears that the UK Government is now seeking to create an appearance that the Guardian and Washington Post’s disclosures are harmful, and they are doing so by intentionally leaking harmful information to the Independent and attributing it to others. The UK Government should explain the reasoning behind this decision to disclose information that, were it released by a private citizen, they would argue is a criminal act.”
The Middle East operation is reported to be part of a wider GCHQ surveillance and monitoring system, code-named Tempora, a £1bn scheme to monitor communications around the world. Information collected at the installation is sent to GCHQ’s headquarters in Cheltenham and shared with the National Security Agency in the US. Content is held in storage “buffers” before being sifted for material of particular interest.