Liberal Democrat leader Nick Clegg today announced plans for a Digital Rights Bill, to be introduced within the first six months of forming a new coalition government.

The deputy prime minister, launching a public consultation on the bill, called for an all-encompassing Act of Parliament to set out the rights of British citizens in digital spaces such as social media services, smartphone apps and government websites.

Key measures would include prison sentences for companies conducting data theft and illegally selling person data, although the party declined to specify how and to whom these might be applied. The Information Commissioner would also gain enhanced powers to inspect companies breaking data protection laws.

In addition, consumers would be entitled to compensation when tricked into signing up to deliberately misleading terms and conditions. The bill would include a code of practice for online services, who would be required to correct inaccurate or defamatory information about members of the public.

Meanwhile, the Government itself would have its hands tied by the bill, which would enshrine in law its responsibility to defend the free press and the rights of journalists to express views freely online. Government would also be prevented from watering down cybersecurity and encryption measures.

The proposal has several key aims, including ensuring that rights that apply in the physical world apply online and establishing key rights particular to the digital sphere. It also aims to ensure greater transparency in how governments and private companies use personal data and empower citizens to take control of their own data.

Clegg commented: "The way in which we work, socialise, buy products and use services has changed at lightning speed since the digital revolution.

"However, government and politicians have responded at snail’s pace, with a poor understanding of new technology and the impact it is having on our lives. We need to ensure that consumers, businesses, journalists and our children are protected in the online world."

Clegg added: "Our Digital Bill of Rights will finally enshrine into law our rights as citizens of this country to privacy, to stop information about our lives being misused, and to protect our right to freedom of speech."

The Liberal Democrats may not be in a position to implement the bill, as they are expected to lose a significant number of MPs at the upcoming general election. A recent Lord Ashcroft poll suggested that Nick Clegg himself might even lose his Sheffield seat.