The head of MI5 has called for an overhaul of the UK's "outdated" espionage laws - warning the security services were "operating with one hand behind our backs."
Although Ken McCallum said it was "important not to frame this as Cold War II" he added: "We do need to stand up for our values, for our system, for the benefits of the democratic way of life that we, and our allies, hold dear."
In an interview with the Daily Mail, he said the UK's Official Secrets Act was outdated and meant "we are in effect operating with one hand behind our backs on state threats."
"Laws that had stood the test of time over theft of state secrets are insufficient to deal with the more nuanced interconnected world in which we all live," he said.
"We don't have in my view sufficient legal powers to deal with some of what we are now seeing.
"With state threats we seek to do everything we can to make the UK resilient but in many cases we don't have the ability to bring prosecutions in the criminal courts, for example it is not presently a criminal offence to be a covert agent of a foreign power."
The Government has already outlined plans to reform the Official Secrets Act, which it has also called outdated.
The plans include replacing the word "enemy" with "foreign power" and including cases of espionage as crimes regardless of whether the individual is a British citizen.
Boris Johnson has also pledged to introduce a Bill creating a criminal offence if individuals working on behalf of foreign governments do not register their presence.
Mr McCallum said that "espionage and interference" from a number of "powerful nations" had become increasingly common in recent years.
He said: "We need to be clear that there is in effect a contest of different worlds now taking place, sometimes visibly, sometimes invisibly, between the liberal democrat model West and the more authoritarian model nations.
"What we are dealing with won't, I don't think, become a confrontation of the sort our grandparents would recognise. [And] the UK does not need to cut itself off from the world.
"But we do need to be clear that standing up for our values and our way of life matters and sometimes that involves tough choices."
He said that MPs should expect more security alerts like the one released by MI5 about Christine Lee last month and claimed that both Russia and China were attempting to access advisers close to the Prime Minister.
MI5 took the rare action of circulating a warning to MPs that Christine Lee - a prominent London-based solicitor - had been engaged in "political interference activities" on behalf of China's ruling communist regime.
