Some companies have already begun moves to distance themselves from the legislation, which is now in the House of Lords, by drawing up plans to move operations abroad.
By submitting your email address, you agree to receive emails regarding relevant topic offers from TechTarget and its partners. You can withdraw your consent at any time. Contact TechTarget at 275 Grove Street, Newton, MA.
In a letter to Computer Weekly, Clarke insisted that the Government has no intention of "imposing unreasonable burdens on industry" that would force it to move.
"Businesses are sophisticated animals. Shuffling away from a country does not seem to be industry's style.
"We have introduced amendments to the Bill to allay industry fears about the possibility of receiving spoof decryption notices, and we've restricted the circumstances when keys may be demanded," Clarke said.
"There needs to be clarity and consistency over the form of notices and audit trails for queries, and we'll be consulting on this," he said.
Despite Clarke's comments, business and legal experts said it was still unclear if proposed government amendments would make it into primary legislation.
Issues such as how a code of practice would apply, and continued concerns over decryption measures still remain to be answered.