WASHINGTON: Civil liberties and digital rights groups gave a lukewarm welcome to President Barack Obama's plan to curb US surveillance programs Friday, warning it only partly addressed critical privacy concerns.

While activists generally welcomed moves to limit the powers of the US National Security Agency, notably in bulk collection of phone records, but said this should be only the start of the reform effort.

Anthony Romero, executive director of the American Civil Liberties Union, said improved transparency at a secretive court and privacy protection for non-US citizens were "necessary and welcome."

But he added that "the president's decision not to end bulk collection and retention of all Americans' data remains highly troubling."

"When the government collects and stores every American's phone call data, it is engaging in a textbook example of an 'unreasonable search'," he argued.

Obama proposed that the bulk phone metadata now being collected by the NSA be transferred to an entity outside the government.

Possible alternatives include keeping records with telecommunications firms, which are currently compelled to turn it over to the NSA, or to deposit it with a third party.

But that failed to mollify critics of the program.

"The right answer here is to stop the bulk collection completely, not to keep the same bulk data under a different roof," said Kevin Bankston of the New America Foundation's Open Technology Institute.

In a bid to quell a furore over the far-reaching US digital surveillance programs exposed by fugitive NSA contractor Edward Snowden, Obama said he had halted spy taps on friendly world leaders and proposed new protections for foreigners caught in US data mining.

That may appease some of Obama's critics abroad -- although not online freedom activists like WikiLeaks's Julian Assange, who denounced the speech.

And inside the United States, there were concerns it did not go far enough.

Cindy Cohn of the Electronic Frontier Foundation said Obama "took several steps toward reforming NSA surveillance, but there's still a long way to go."

"Other necessary reforms include requiring prior judicial review of national security letters and ensuring the security and encryption of our digital tools, but the president's speech made no mention of these," Cohn said.

National security letters are used mainly by the FBI to gather information about an investigation, without court approval.

Obama also said that from now on, NSA agents would need the endorsement of a special intelligence court before accessing data on a specific target.

The NSA will also now only be permitted to access call data from people at up to two removes from a suspect in an investigation. Previously it could probe three "hops."

But the president made clear that the retention of phone data could provide a vital tool for US spies to trace links between terror suspects and must continue.

Steven Hawkins, Executive Director of Amnesty International USA said privacy still remains under threat.

"President Obama's recognition of the need to safeguard the privacy of people around the world is significant, but insufficient to end serious global concern over mass surveillance, which by its very nature constitutes abuse," he said in a statement.

Greg Nojeim of the Center for Democracy and Technology said Obama glossed over or left out questions about US privacy laws and measures "to repair the damage to the Internet caused by the NSA's efforts to undermine communications security."

"Far more needs to be done to restore the faith of the American people and repair the damage done globally to the US reputation as a defender of human rights on the Internet," Nojeim said in an email.

"The lack of specifics in the president's remarks and in the directive he issued today means that this is only the beginning of a much-needed conversation, not the end."