Spy chiefs should hand control of America's sweeping telephone data record collection to private telecommunications companies, according to a task force set up by President Barack Obama to review the controversial surveillance programme.
The panel of five experts also recommended future eavesdropping on foreign leaders should be approved only by a president, not intelligence officials, if "rigorous" tests were passed.
While the panel's 46 recommendations broadly call for more oversight of the Government's vast spying network, few programmes would be ended. There's also no guarantee the most stringent recommendations will be adopted by Obama, who is not obligated to implement the findings.
Revelations that the National Security Agency (NSA) was collecting "metadata" from millions of telephone calls and monitoring the communications of allies such as Angela Merkel, the German Chancellor, prompted widespread criticism in the United States and abroad.
Obama established the team of intelligence and legal experts to review NSA operations in response to the outcry that followed the leaks from Edward Snowden, a former agency contractor.
The task force said it sought to balance the nation's security with the public's privacy rights and insisted the country would not be put at risk if more oversight was put in place. In fact, the report concludes, telephone information collected in bulk by the NSA and used in terror investigations "was not essential to preventing attacks".
"We're not saying the struggle against terrorism is over or that we can dismantle the mechanisms that we have put in place to safeguard the country," said Richard Clarke, a task force member and former government counterterrorism official. "What we are saying is those mechanisms can be more transparent."
Although the panel advised that the collection of bulk telephone data could continue, the proposed curbs were more far-ranging than the President and his national security team expected.
Obama met the advisory group yesterday to discuss their 46 findings and will announce which recommendations he intends to implement next month. The White House unexpectedly brought forward publication of the report as leaks about its contents swirled. The White House is conducting its own intelligence review.
Senior defence and intelligence officials have already privately expressed their firm opposition to several of the suggested new restrictions.
"This report far exceeds the remit set for the review and the defence community believes that 10 to 12 of the recommendations would have a serious negative impact on national security," a senior defence official said.
The advisory group said the "metadata" records should in future be stored by private companies such as AT&T and Verizon, not the NSA, and that there should be greater court supervision before "queries and data mining" were authorised.
Some panel members were also said to support splitting command of the NSA from the Pentagon's cyber-warfare unit to reduce concentration of power.
But the New York Times reported that Obama had rejected that option.
The review also recommended the NSA stop seeking access to private and encrypted communications for technology company users, a practice that has angered Silicon Valley.
The findings of the so-called Review Group on Intelligence and Communications Technologies were released during another bruising week for the NSA.
A federal judge gave an initial ruling on Monday that the "almost Orwellian" bulk collection of telephone data appeared to violate the US constitution.
The judge, Richard Leon, said there was little evidence the gargantuan inventory of phone records from American users had prevented a terrorist attack. However, he stopped his ruling from taking effect, pending a likely government appeal.
And on Wednesday, executives of major US technology companies such as Google, Yahoo and Apple told Obama about their dismay at the US surveillance operations in a meeting at the White House.