Police insist they have not had the wool pulled over their eyes by intelligence services over the death of codebreaker Gareth Williams.
Britain's enemies are "rubbing their hands with glee" over whistleblower Edward Snowden's NSA leaks, the MI6 chief said.
Secret files reveal drunken meeting between Stalin and Churchill, a cross-dressing spy and King Edward VIII's phone bug.
Sir Malcolm Rifkind has said that security chiefs speaking to MPs in public today was "an historic occasion" that will be repeated.
The Chair of the Intelligence and Security Committee added that he believed those involved were glad of the chance to speak publicly.
He said: "Many of them have been upset at the accusations that they have been doing something improper or doing something unreasonable to their fellow citizens.
"I suspect they were pleased to have the opportunity in public to speak about the work their own staff do and how important it is to the national interest."
Just out of spy chiefs session. Felt key line the attack on Snowden leaks that Al Qaeda would be lapping up, enemies rubbing hands with glee
Spy chiefs clear they believe Snowden leaks & media coverage of it caused damage to their operations. Terrorists now changing communications
MI6 chief Sir John Sawers said the leaks from NSA whistleblower Edward Snowden "have been damaging and put operations at risk."
Al-Qaeda is "lapping up" the leaks and Britain's enemies are rubbing their hands with glee, the British intelligence chief added.
Asked if GCHQ could guarantee it does not operate beyond UK law, Sir Iain Lobban replied: "I can give you that guarantee. I believe that to be true. We are subject to the law."
Some work that GCHQ carries our is "necessarily secret," Sir Iain Lobban said.
"I don't think secret means unaccountable in any sense."
"I don't think secret means sinister," he added.
"We do not spend our time listening to the telephone calls or reading the emails of the majority," GCHQ boss Sir Iain Lobban told the committee.
GCHQ boss Sir Iain Lobban listed current key cyber threats: industrial espionage, terrorists, hacktivists, highly-sophisticated criminal actors, non-state actors, and "engagement by some states as an over-the-horizon means of disruption."
MI5 has disrupted 34 terrorist plots "at all sizes and stages" since the 7/7 bombings in London in 2005, Andrew Parker told the committee.
"The vast majority come from people who live here."
"Terrorist tourism" is growing, especially to places like Syria, MI5's Andrew Parker has told the committee.
Britons in their "low hundreds" have gone to Syria to align with Al-Qaeda-affiliated groups operating there, he said.