Smart cities could become vulnerable to relentless citizen spying by authoritarian states, the head of Britain’s top intelligence agency said on Friday.

Countries such as China have the “technological weight” to impose intrusive surveillance systems in advanced urban areas, said Jeremy Fleming, the director of the Government Communications Headquarters (GCHQ).

He also warned that the growth of cyber technology poses an “existential threat to our way of life”, with criminals using ransomware to target schools, hospitals and supply chains.

But it is technologically-advanced conurbations that could become targets for hostile states to gather information and potentially carry out cyber attacks that pose a significant threat to society.

The original vision for smart cities was “to know everything about things, but nothing about individuals”, allowing people to more easily “navigate life, not track your movements,” Mr Fleming said. “But unchecked or implemented in the wrong way, there’s a risk that we will import technology which hardwires data collection in ways that go against our interests and values.” He added: “They can be used to enable significant intrusions into the lives of citizens and companies. There’s a lot at stake here.”

The new digital environment could lead to the point where Western countries are “replaced by players who don’t share our values or follow the rules”.

“If we try to rest on our past successes it will be our adversaries and competitors who will shape the future world we live in,” Mr Fleming warned.

He named Russia and China as adversaries and competitors who could “shape the future world we live in”.

While Russia’s hostile cyber and intelligence actions amounted to “affecting the weather, it is China that is shaping the climate”, he said.

But the spy boss, who leads a force of 10,000 cyber and intelligence experts, also issued the threat that Britain had the offensive cyber power to retaliate against hostile states and gangs who steal secrets and hamper civilian institutions.

“Offensive cyber is simply another lever of power that can be used to eliminate threats, amplify our values and pursue our national interest,” he said, in a speech at Imperial College London.

While digital technology has provided great benefits, advances such as superfast broadband have also helped criminals or states using malware to acquire money or identities, or even to steal Coronavirus research.

“Perhaps even more perniciously we’ve seen ransomware become a serious threat, both in terms of scale and severity,” he said. “Increasingly it targets crucial providers, public services, as well as businesses, as criminals play on our dependence on tech.”

He added that it had resulted in “serious disruptions” to education and health, and caused huge losses for unprepared businesses.