The private images were gathered from millions of Yahoo users with sexually explicit images among those gathered by spy agency GCHQ.
Internet giant Yahoo has denied any knowledge of the programme and has described the revelations from the Guardian as a "completely unacceptable" privacy violation.
In a statement GCHQ said all of its actions were in accordance with the law.
The operation, named Optic Nerve, was aided by the powerful US National Security Agency (NSA) and is said to have stored images transmitted between 2008 and 2010.
Internet giant Yahoo has denied any knowledge of the programme and has described the revelations from the Guardian as a "completely unacceptable" privacy violation.
In a statement GCHQ said all of its actions were in accordance with the law.
The operation, named Optic Nerve, was aided by the powerful US National Security Agency (NSA) and is said to have stored images transmitted between 2008 and 2010.
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