Emails obtained by the BBC appear to suggest some level of collusion between Phorm, the 'behavioural' ad-targeting firm that conducted trials on BT customers without first informing them, and the Home Office.
The emails were uncovered by a member of the public who launched a Freedom of Information request to get them.
According to the Beeb, "e-mail exchanges over a series of months between the department and the firm show the Home Office asking the firm what it thinks of the advice it is drawing up in relation to behavioural targeted advertising, and making specific reference to Phorm's technology".
This is despite the Home Office having previously insisted it gave "any advice to Phorm directly relating to possible criminal liability for the operation of their advertising platform in the UK".
One email sent from the Home Office to Phorm (in 2007, when one of the secret trials was taking place), read: "If we agree this, and this becomes our position do you think your clients and their prospective partners will be comforted?"
Another read: "My personal view accords with yours, that even if it is 'interception', which I am doubtful of, it is lawfully authorised under section 3 by virtue of the user's consent obtained in signing up to the ISPs terms and conditions."
Phorm has denied any suggestion of collusion. The firm has also set up a website, Stop Phoul Play, in which it attacks what it calls the "privacy pirates" that have been "smearing" it and its work.
"Their energetic blogging and letter-writing campaigns, targeted at journalists, MPs, EU officials and regulators, distort the truth and misrepresent Phorm's technology," the site says. "We have decided to expose the smears and set out the true story, so that you can judge the facts for yourself."
Alexander Hanff, a privacy campaigner who is singled out by Phorm as "The Angry Activist", blogged in response that he was "flattered that Phorm see me as such a threat to their business but I am staggered as to what they think this latest 'assault' is going to achieve".
"I have never in my entire life seen such a ridiculously childish action by a multi-million dollar corporation," Hanff wrote. "It smacks of school yard tantrums and I am sure the media and public will see it for exactly what it is - a desperate attempt by Phorm to discredit a group of innocent people concerned about the threat Phorm's technology poses to their privacy."