Straw last week branded opponents of Internet surveillance legislation as "naïve" and claimed that the changes to RIPA they had forced on the government weakened its ability to intercept communications from terrorists.
The e.centre, an e-business trade group, was particularly angered by the former home secretary's statement
E.centre's managing director Alan Boxer said: "Who does Mr Straw think has been naïve in this regard? I certainly do not accept that e.centre and our 16,000 corporate members from all industrial sectors deserve to be accused.
"The e.centre has always supported the government's policy in trying to establish an interception regime to police threats to the economic well-being of the UK. But when government requires communication service providers to set up systems which are technically not feasible, it is only right that industry points out the unworkable nature of such a strategy," he added.
The Institute of Directors (IoD) said tactics used in fighting the RIP Act would have to be reconsidered following the attacks on the World Trade Centre and the Pentagon.
Richard Barron, policy unit director of the IoD, said: "The events of 11 September have put a different complexion on the debate. It changes the whole nature of the argument. There will be more data interception and therefore more burdens on companies.
"I would hope against a knee-jerk reaction from the government, but we totally understand the need for heightened anti-terror legislation. I just hope the government can be clear about what they plan to do."
Pamela Taylor, senior e-business policy adviser at the Confederation of British Industry, added: "We are as concerned about terrorism as the government, but we would urge caution when it comes to increased data interception. The events in the US demonstrated that business is a key target for terrorists and we hope that in response to this the government will continue to seek a balance between new anti-terror legislation and business interests."