The police watchdog is investigating whether Scotland Yard used hackers in India to monitor private emails of political activists, including Greenpeace campaigners and journalists at the Guardian newspaper.
A whistleblower said the secretive unit illegally accessed the accounts of hundreds of people for years.
The person, believed to be a serving police officer, claims documents were destroyed to cover up the work, despite orders to the contrary.
The claims were made in a letter to Green party peer Baroness Jenny Jones, who alerted the Independent Police Complaints Commission (IPCC), which is now investigating.
The letter alleged that shredding of documents "has been happening for some time and on a far greater scale than the IPCC seems to be aware of".
Scotland Yard called the allegations "deeply troubling" and promised to help the watchdog.
Baroness Jones said: "I've been questioning the police on spycops for years and was always assured there was nothing illegal happening. They lied to me."
An investigation into undercover policing was launched in 2015 in the wake of allegations about the activities of secretive units.
But last month the IPCC said there was evidence to suggest documents were shredded after the Undercover Policing Inquiry (UPI) was announced, ignoring specific instructions that files should not be destroyed without permission.
The letter said accessing email accounts "has largely been accomplished because of the contact that one of the officers had developed with counterparts in India who, in turn, were using hackers to obtain email passwords.
"There were several hundred names on the list and all of them were regularly checked, the intelligence graded and then disseminated."
The letter includes email passwords for 10 people who were allegedly targeted, including four working for Greenpeace.
Six of the 10 confirmed to Baroness Jones' lawyers that the passwords were correct or nearly identical.
One person allegedly spied on is Greenpeace volunteer Colin Newman, from Cornwall, who has protested against threats to the oceans.
He told the BBC he felt "surprised, then angry and then violated", saying: "I trust the police. But some of my emails were very private - they include details of counselling. I have had sleepless nights."
According to the letter the "most sensitive side of the work was monitoring the email accounts of radical journalists who reported on activist protests (as well as sympathetic photographers) including at least two employed by the Guardian newspaper".
The author claimed "the main reason for destroying these documents is that they reveal that (police) officers were engaged in illegal activities to obtain intelligence on protest groups".
The letter added: "Many officers (regarded) this as one of the most effective ways of gaining intelligence.
"The police do have a role in monitoring public order protests but it needs to be carried out in a legal and ethical manner. Over the years the unit had evolved into an organisation which had little respect for the law (and) no regard (for) personal privacy."
Baroness Jones said: "If you've ever campaigned to save your local hospital, if you've ever campaigned to save a school, if you've ever been on a peaceful protest , as I have many times, then you should be concerned about the security of your emails."
She added: "These people (on the list) are not criminals, they are members of Greenpeace, they are journalists, they are people who have not committed a serious crime and yet they are being spied on by the police."
Sir Christopher Pitchford, chairman of the UPI, urged the whistleblower to come forward.
He said: "In my view, the Independent Police Complaint's Commission is undoubtedly the right body to investigate in the first instance. At present the inquiry is unaware of any connection between the allegations in this letter and the inquiry's terms of reference."
Scotland Yard said "all possible steps" were being taken to preserve material for the IPCC.
It said: "Whilst at this stage the allegations have not been thoroughly investigated, they are deeply troubling and the MPS will provide the IPCC with its fullest possible support."