* Britain taps into fibre-optic cable in the Middle East
* British spies shares the data with the United States
* Exact location of spy station not disclosed
By Costas Pitas
LONDON, Aug 23 (Reuters) - Britain runs a secret monitoring station in the Middle East to intercept large numbers of telephone calls, emails and internet traffic that it shares with intelligence agencies in the United States, the Independent newspaper reported on Friday.
The station is part of a 1 billion pound ($1.56 billion)global eavesdropping project run by Britain to intercept digital communications, the newspaper said, citing leaked documents from former U.S. National Security Agency contractor Edward Snowden.
Snowden's leaks have sparked a global surveillance scandal that has pitted U.S. President Barack Obama against the Kremlin and prompted British Prime Minister David Cameron's advisers to demand the return of secrets from the Guardian newspaper.
The London-based Independent, which did not say how it got access to the information from the Snowden documents, said the British had tapped into the underwater fibre-optic cables which pass through the Middle East.
Data gleaned from the monitoring station, whose exact location the Independent said it would not reveal, is then passed onto Britain's eavesdropping agency (GCHQ) in Cheltenham, England, and shared with the U.S. National Security Agency.
Western intelligence agencies rushed to improve their monitoring of Middle East traffic after the attacks on the United States on Sept. 11, 2001.
Britain's monitoring station in the Middle East was set up under former Foreign Secretary David Miliband, who served in that post between 2007 and 2010, the Independent said.
Britain's foreign ministry declined comment. A spokesman for GCHQ could not be reached for immediate comment on the report.
Snowden's leaks have embarrassed both Britain and the United States by laying bare the extent of their surveillance programmes. London and Washington say their spies operate within the law and that the leaks have damaged national security.
British police said on Thursday that documents seized from the partner of a Guardian journalist who has led coverage of Snowden's leaks were "highly sensitive", and could put lives at risk if it fell into the wrong hands.
Counter-terrorism detectives said they had begun a criminal investigation after looking at material taken from David Miranda, partner of American journalist Glenn Greenwald, during his nine-hour detention at Heathrow Airport on Sunday.
Miranda, a Brazilian citizen who had been ferrying documents between Greenwald and a Berlin-based journalist contact of Snowden's, was held at Heathrow under anti-terrorism powers, before being released without charge minus his laptop, phone, a computer hard drive and memory sticks. He has since left Britain for Brazil. ($1 = 0.6421 British pounds) (Editing by Guy Faulconbridge and Jon Boyle)