The Guardian said that OPTIC NERVE was intended at least in part to identify targets using automatic facial recognition software as they stared into their computer's webcams.
But the stockpiling of sexually explicit images of ordinary people had uncomfortable echoes of George Orwell's "Nineteen Eighty-Four," where the authorities - operating under the aegis of "Big Brother" - fit homes with cameras to monitor the intimate details of people's personal lives.
"At least Big Brother had the decency to install his own cameras," British media lawyer David Banksy said in a message posted to Twitter after the revelations broke. "We've had to buy them ourselves."
The collection of nude photographs also raises questions about potential for blackmail. America's National Security Agency has already acknowledged that some analysts have been caught trawling databases for inappropriate material on partners or love interests.
Other leaked documents have revealed how US and British intelligence discussed leaking embarrassing material online to blacken the reputations of their targets.
GCHQ refused to answer a series of questions about OTPIC NERVE, instead returning the same boilerplate answer it has given to reporters for months.
"It is a longstanding policy that we do not comment on intelligence matters," the agency said, insisting all its work was legal, necessary, proportionate, and subject to rigorous oversight.
