The Government's surveillance watchdog has warned public officials against setting up false identities on social media for covert investigations.
The Office of Surveillance Commissioners said public authorities may be unlawfully using the likes of Facebook and Twitter for their inquiries as they are not seeking proper authorisation.
A number of public authorities have run awareness campaigns with amnesty periods for any unauthorised activity, such as when officers have created false personae to disguise their online activities, the Office said in its annual report.
Chief Surveillance Commissioner Sir Christopher Rose said: "In cash-strapped public authorities, it might be tempting to conduct online i nvestigations from a desktop, as this saves time and money, and often provides far more detail about someone's personal lifestyle, employment, associates, etc.
"But just because one can, does not mean one should.
"The same considerations of privacy, and especially collateral intrusion against innocent parties, must be applied regardless of the technological advances."
Using social networks for investigations may require authorisation under the Regulation of Investigatory Powers Act (Ripa).
Sir Christopher said many local authorities and government departments have yet to recognise the potential for inadvertent or inappropriate use of such sites.
He said: "While many have warned their staff of the dangers of using social media from the perspective of personal security and to avoid any corporate damage, the potential need for a Ripa authorisation has not been so readily explained."
Elsewhere in the report, Sir Christopher raises concerns about the supervision of undercover police officers.
Officers who are supposed to oversee the activities of undercover operatives and report to the senior authorising officer have been found to actually be part of the wider operation team they are supposed to be holding to account.
In addition, Sir Christopher found risk assessments of undercover officers were "too formulaic", while others in long-running operations were subject to "cut and paste" reviews.
Turning to disclosures made by former National Security Agency contractor Edward Snowden, which sparked an international debate about the extent of surveillance powers, Sir Christopher said it was not his "responsibility to give a view upon how much or how little use is made of the tactics that I oversee".
However, he later added: "It is also highly unlikely, given the robust processes and internal scrutiny in place within public authorities, let alone ever-tightened resources, that, save in very rare circumstances, unauthorised activity has occurred."
In addition, the Commissioner said he was "satisfied that the public has no cause for any general concern".
Property interference authorisations, such as installing an eavesdropping device in a car, for law enforcement and public authorities increased by 249 to 2,689 in the year 2013/2014, the report said.
Intrusive surveillance authorisations, such as that in a private home, increased from 362 to 392 in the same period.
Authorisations for direct surveillance by law enforcement agencies, that is covert but not intrusive surveillance used to obtain information about a person, were up from 9,515 to 9,664.
But direct surveillance by public authorities fell to 4,412 authorisations from 5,827. The vast majority of these authorisations related to the Department for Work and Pensions spying on potential benefit cheats.
There were 3,025 undercover sources - also known as covert human intelligence sources - authorised for use by law enforcement at the end of March this year, compared to 2,816 the previous year.
Covert human intelligence sources within other public authorities remained flat at 53.
Law enforcement agencies reported 79 irregularities during the period covered by this report, while other public authorities reported four, a total of 83. This compares to 99 reports in 2012-13.
Sir Christopher said this could be matters such as installation of surveillance equipment without a valid authorisation, overdue switching off of a recording device after cancellation of the authorisation and inadvertent trespass where one police force boundary meets another.
A written ministerial statement from Prime Minister David Cameron said: "The report from the Chief Surveillance Commissioner shows that in the vast majority of cases covert techniques are being used effectively, when it is necessary and proportionate to do so.
"The report notes a small number of errors reported to the Commissioner. The number represents a tiny proportion of the total number of authorisations, and a decrease on the previous year. The Chief Commissioner found nothing to suggest wilful misconduct."
Emma Carr, director of Big Brother Watch, said: "While long overdue, the Office of Surveillance Commissioners is absolutely right to acknowledge that many public authorities around the country may well be covertly gathering intelligence from social media sites illegally.
"RIPA was created while Google was still in its infancy and social media sites like Facebook and Twitter did not yet exist.
"It would therefore be ridiculous to expect that the legislation would allow the use of the internet to proportionately investigate crimes, while ensuring that safeguards are in place to protect the public's privacy.
"A far more open discussion about what data should be monitored, as well as whether the legal framework is truly fit for the digital age, is required."