The hugely critical report made 86 recommendations to the existing bill, noting that while MPs and peers could see potential benefits of giving intelligence agencies greater web browsing powers, the committee had "not been persuaded that enough work has been done to conclusively prove the case for them."
"The fact that we have made 86 recommendations shows that we think that part of the bill is flawed and needs to be looked at in greater detail. There is a lot of room for improvement," said Lord Murphy, chair of the committee and former Northern Ireland secretary.
'Dangerous International Precedent'
The criticism follows the publishing of two other parliamentary reports from the Science and Technology Committee and the Intelligence and Security Committee (ISC), which were also heavily critical of the bill, dubbed the Snoopers' Charter.
Responding to the parliamentary findings, Harmit Kambo, campaign director at Privacy International, told Sputnik that the passing the bill in its current form would set a dangerous precedent and give legitimacy to other nations looking to establish similar "intrusive" pieces of legislation.
"It's going to be a race to the bottom. If we pass legislation like this it enables every other country in the world to pass similar legislation and the future of the Internet is in peril."
While noting the need for up to date legislation in the area, Mr Kambo said the government should use the recent parliamentary findings as a "roadmap" to make "very substantial revisions" to the bill.
"They need to go back to the drawing board. They need to do a fundamental root and branch rewrite of this piece of legislation and make it far more clear, far more transparent and need to make sure that privacy is the backbone of this legislation."
Concerns Over Bulk Data Collection
Mr Kambo has called for the protection of Internet privacy to feature as the backbone of the bill, highlighting concerns raised by the recent ISC report.
"Given that it was meant to respond to the massive public concerns that arose after the Snowden revelations, it's remarkable how little attention it pays to privacy safeguards."
On top of the MPs' concerns, there has been a widespread public outcry and criticism from major tech companies against Britain's proposals, particularly in regards to measures that would oblige tech companies to weaken encryption services by offering a 'backdoor' for intelligence agencies to access the communications of people suspected of being involved with terrorism or criminal activities.
Hitting back at the criticism, the government has argued that it needs to be able to access the communications of the population in order to help it combat security fears.
The issue of bulk collection of Internet data is of huge concern to activists however, with Mr Kambo pointing to the ISC's recent findings.
"The ISC has taken evidence from the security agencies, Theresa May and her officials in closed sessions and they have been unconvinced by the use of bulk powers. That is a massive and deeply important point — that they have made no case for mass surveillance, which is what bulk powers in effect are."