The Foundation for Information Policy Research (FIPR) sent an open letter to the Home Secretary, Jacqui Smith, criticising the decision of the government to rubber stamp the technology.
According to the FIPR, the Home office's previous statement is now obsolete and misleading "in the light of new technical and legal analysis of Phorm's system".
Research carried out by Dr Richard Clayton, FIPR's Treasurer and Nicholas Bohm, its General Counsel have revealed that the technology employed by Phorm includes:
* interception of communications, an offence contrary to section 1 of the Regulation of Investigatory Powers Act 2000
* fraud, an offence contrary to section 1 of the Fraud Act 2006
* unlawful processing of sensitive personal data, contrary to the Data Protection Act 1998
This, they say, makes the individual directors and Managers of Internet Service Providers directly liable to prosecutions.
But it could well tank up as security firms like Sophos, could stepped up and block Phorm cookies which record the user profiles; something like anti adware like Search and Destroy or AdAware already do.
Speaking to the BBC, Graham Cluley of Sophos said : "Out aim is to give companies the power to police their user's safe use of the web, rather than disrupt what some may consider legitimate internet traffic."
You can read our coverage of Phorm here.