The scandal broke in April when it emerged the phones of Catalan separatist leaders had been tapped by Spanish intelligence services.
It widened when the government confirmed the phones of Sánchez and the defence and interior ministers were also targeted in an “external attack”.
The affair has sparked a crisis between Sánchez’s minority government and Catalan separatist party ERC.
Sánchez’s fragile coalition relies on the ERC to pass legislation in parliament and remain in power until the next general election due at the end of 2023.
“It is a question of strengthening the guarantees of this control but also of ensuring maximum respect for the individual and political rights of people”, Sánchez told parliament as he announced the reform.
Sánchez also said the government will adopt a new law governing “classified information”, which will replace the existing legislation adopted in 1968 during the dictatorship of General Francisco Franco.
“We must urgently adopt regulations to democratic, constitutional principles,” he said.
The government last month sacked the head of Spain’s CNI intelligence agency, Paz Esteban, over the hacking scandal. She was the first woman to lead the agency.
Her dismissal came after she told a parliamentary committee that 18 Catalan separatists, including Pere Aragonès, the head of Catalonia’s regional government, had been spied on by the CNI but always with court approval.
Canadian cybersecurity watchdog Citizen Lab had said in April that the phones of over 60 people linked to the Catalan separatist movement had been tapped using Pegasus spyware after a failed independence bid in 2017.
The scandal deepened after the government announced on May 2 that the phones of Sánchez and Defence Minister Margarita Robles were hacked by the same spyware, made by Israel’s NSO group, in May and June 2021.
Sánchez is the first serving head of government confirmed to have been targeted by controversial Pegasus spyware.
The government later said Interior Minister Fernando Grande-Marlaska’s phone was also among those hacked last year
The revelations raised questions over who is to blame and whether Spain has adequate security protocols.