The Guardian has been criticised for its coverage of classified documents
The Guardian performed a "considerable public service" when it published details of surveillance programmes, Vince Cable has said.
The business secretary added there needed to be "political oversight of the intelligence services".
Earlier, a senior UK security expert said the leaking of documents by Edward Snowden was the "most catastrophic loss to British intelligence ever".
Sir David Omand said it was likely that China and Russia now had the data.
Mr Cable's comments appeared to contradict those of his Lib Dem party leader, Nick Clegg, on Thursday, who described the publication of the leaks as damaging.
'Good' system already
In May, Mr Snowden leaked information to the Guardian about mass surveillance programmes such as the US National Security Agency's Prism and GCHQ's Tempora operations.
The Guardian has defended its decision to publish documents leaked by the former US intelligence worker, who was granted asylum in Russia, and has vowed to publish more.
Mr Cable told BBC Radio 4' Today programme: "I think Mr Snowden's contribution is two-fold. One is a positive one - the whistleblowing - the other is more worrying which is a large amount of genuinely important intelligence material does seem to have been passed across.
"We do need to have proper political oversight of the intelligence services and arguably we haven't until now," he added.
Earlier this year, the government's Intelligence and Security committee's powers to scrutinise the work of the security services were increased.
Under the Justice and Security Act 2013, the committee now has a statutory power to demand information from the security services, instead of the right to request documents and staff now have powers to go into the offices of MI5, MI6 and GCHQ and look at material.
Edward Snowden has leaked details of surveillance programmes to media outlets
Prime Minister David Cameron said there would be no review of the oversight of the security services, despite Guardian reports that Deputy Prime Minister Mr Clegg was to start conversations in government about updating the way politicians oversee the security services.
The prime minister said on Thursday "a good legal framework" already existed.
On Friday a spokesman said Mr Cameron "thinks the current system is a good one and it works well," but "if others have ideas he is prepared to listen to them".
'Seriously damaging'
Mr Clegg responded to the question of more oversight of the security services on Friday saying the government had already "significantly strengthened the powers of oversight".
But he added that "many of these revelations have quite rightly raised questions about how we can increase oversight further where that is clearly justified".
Sir David, who is the former head of the UK's communications surveillance centre GCHQ, told The Times: "You have to distinguish between the original whistleblowing intent to get a debate going, which is a responsible thing to do, and the stealing of 58,000 top-secret British security documents and who knows how many American documents, which is seriously, seriously damaging.
"The assumption the experts are working on is that all that information or almost all of it will now be in the hands of Moscow and Beijing."
He said it was "the most catastrophic loss to British intelligence ever".
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