Britain's version of the National Security Agency, the GHCQ, has reportedly captured images from the webcam chats of millions of Yahoo users. And Yahoo is not happy about it, to say the least.

Yet another privacy-invading spy project has been exposed by secret documents leaked by ex-NSA contractor and whistleblower Edward Snowden, as originally reported by The Guardian.

The new report might remind you of George Orwell's 1984: The U.K.'s surveillance agency, with the help of the NSA, has reportedly "intercepted and stored webcam images of millions of internet users not suspected of wrongdoing" says The Guardian.

Appropriately codenamed "Optic Nerve," the GCHQ files from between 2008 and 2010 state that the agency collected stills from Yahoo webcam chats and saved them in its databases. The collection was reportedly done randomly and in bulk, without regard to whether the users were intelligence targets or not. The program was still active as of 2012, according to the documents.

Images from the web chats of over 1.8 million Yahoo users across the globe were reportedly collected in 2008 alone. The Guardian reported that the U.K. spy agency does not possess the "technical means to make sure no images of UK or US citizens are collected and stored by the system," and also mentioned that no U.K. laws restrict images of Americans being pilfered without a warrant. 

Reportedly, the only limitations on the GCHQ's Yahoo web chat image collection were human rights legislation and the prospect of overloading the agency's servers. Instead of saving the entire video, the Optic Nerve program would take one still snapshot every five minutes from randomly selected Yahoo webcam chats and store them. The database of webcam images would then be used by the GCHQ to test and improve automated facial recognition software, as well as monitoring GHCQ intelligence targets.

While the spy agency made efforts to restrict its analysts' access to webcam images -- only allowing searches to metadata -- and it also attempted to filter out explicit images, The Guardian's report states that the filtering software wasn't fool proof, and webcam image collection indeed included "substantial quantities of sexually explicit communications" from users: as much as 11 percent "undesirable nudity," noted one document.

For Americans, the prospect of the government -- in this case, a foreign government -- collecting and holding, by definition, one's most intimate private data may be the apex of invasion of privacy. For gamers who worried about the Xbox One's always-on camera -- 1984-inspired objections like, "It'll let the government look into my living room," which were once dismissed as hyperbole -- it turns out there's a legitimate cause for concern: Those same documents reportedly discuss the Xbox 360's Kinect camera, specifically, as being of potential interest as well.

For Yahoo, it's a new source of furious indignation. A Yahoo representative responded in a statement to The Guardian:

"We were not aware of, nor would we condone, this reported activity. This report, if true, represents a whole new level of violation of our users' privacy that is completely unacceptable, and we strongly call on the world's governments to reform surveillance law ... We are committed to preserving our users' trust and security and continue our efforts to expand encryption across all of our services."

The Guardian also received a statement from the GCHQ:

"It is a longstanding policy that we do not comment on intelligence matters ... Furthermore, all of GCHQ's work is carried out in accordance with a strict legal and policy framework which ensures that our activities are authorised, necessary and proportionate, and that there is rigorous oversight, including from the secretary of state, the interception and intelligence services commissioners and the Parliamentary Intelligence and Security Committee ... All our operational processes rigorously support this position."