Speaking at the launch of a new report called The Data Dialogue by think tank Demos, Graham said that policies around the use of personal data by companies and public sector organisations need to be evidence-based.

"More and more citizens and consumers are waking up to the implications of sharing personal data online," he said. "By fresh thinking that recognises where the consumer is coming from, we can develop policies that really work."

His criticism of the cookie directive, formally known as the , was backed up by Jamie Bartlett, senior researcher at Demos and author of the report, who said that implementation of the law had "become far too onerous".

The directive requires anyone running a website to get explicit opt-in consent from their visitors before deploying cookies on their machines.

Meanwhile Ronan Dunne, chief executive of O2, said that presenting consumers with a pop-up window that gives them the option to opt in or out of data sharing is a "very blunt tool" to deal with an extremely nuanced issue.