Civil servants could be given “dangerous” powers to access the public’s bank accounts under Government plans. The new fraud Bill will allow mid-ranking officials to ask banks to provide personal information about a person’s account without a court order, and extract funds if they “reasonably believe” that money is owed to the taxpayer.

As it stands, the legislation would prevent a bank from telling its customers if the Government has asked to see what is in their account. A user might only become aware of what had happened when their account was frozen, or money disappeared.

Privacy campaigners and peers have raised concerns about the legislation, which would give pen pushers powers that are usually reserved for police investigators.

Big Brother Watch, the civil liberties campaign group, warned that the “dangerous new bank spying powers” would “effectively turn banks into agents of the state, tasked with spying on everyone’s bank accounts and reporting back to the Government”.

The civil servants could also get power to ask for a search and entry warrant and to freeze bank accounts, in one of the most significant transfers of enforcement powers to non-police officials on record.

Ministers insist the rules will help the Cabinet Office crack down on public sector fraud but opponents believe that they are an unacceptable breach of civil liberty.

The proposals follow warnings about similar action against suspected benefit cheats by the Department for Work and Pensions (DWP), as well as a plan for HMRC to gain access to more financial information about taxpayers.

The legislation, which is currently under review in the Lords, does not require officials to seek permission from a minister before requesting access to a bank account.

The powers given to the Cabinet Office can be wielded by any anti-fraud official with a civil service rank above “higher executive officer” – a Whitehall middle manager.

The Telegraph reported that the idea was first suggested by the previous Conservative government after one of Boris Johnson’s ministers resigned over how fraud was handled by government departments.

But Labour ministers have decided to increase the power of civil service investigators.

Lord Vaux, a crossbench peer, warned the measures would give severe police powers to “relatively junior civil servants in the Cabinet Office”.

Speaking last month, he said: “If handing police powers to civil servants was not chilling enough, here are powers that facilitate the state raiding bank accounts.”

A DWP spokesman said: “We are bringing forward the biggest fraud crackdown in a generation, as part of wider plans that will save £9.6 billion by 2030.

“It is right that we modernise our approach to catching fraudsters and identifying overpayments at the earliest stage. All the powers in the Bill are underpinned by a principle of fairness and proportionality and do not involve mass surveillance of people’s bank accounts.

“We are absolutely clear we will not tolerate any waste as we protect taxpayers’ money, ensuring people get the money they are entitled to, and we invest in our public services as part of our plan for change.”