A controversial computer surveillance project that would comb through the personal records of Americans in the search for suspected terrorists has suffered a severe setback.
The Bush administration backs the snooping plan
The US Senate has voted to cut funding for the programme, known as Terrorism Information Awareness (TIA), despite pressure from the White House to back it.
Civil liberties activists have been vocal in their opposition to the plan, arguing it would impose a Big Brother state and intrude into the privacy of Americans.
The future of the multi-million dollar programme will be determined in talks on Capitol Hill but experts say the opponents of TIA are likely to win the day.
The widely criticised programme, which was previous known as Total Information Awareness, was the brainchild of John Poindexter.
He is a key figure from the Iran-Contra scandal, who is now at the military research institute, the Defense Advanced Research Projects Agency, (Darpa).
The TIA project would collect as much information about every single aspect of everyone in America as possible, from doctor's records to bank deposits, e-mail to travel tickets, phone conversations to magazine subscriptions.
Critics said the plan would create a Big Brother state
The aim was to used advanced data-mining tools to look for patterns of terrorist activities in the electronic data trails left behind by everyone.
But the Senate vote to unanimously forbid the Defense Department from spending any of its $369 billion budget on the TIA programme, despite assurances from the Pentagon that it would protect the privacy of citizens.
A plea from the Bush administration calling on the Senate to back the project also fell on deaf ears.
"This provision would deny an important tool in the war on terrorism," said the White House in a statement on Monday.
Critics of TIA had argued it would create a Big Brother state in which Americans would have no privacy.
Others argued that such a technology-intensive approach would not necessarily help, and possibly hinder, the fight against terrorism.