Matt Stuart photographs the unscripted drama of the London streets. Entirely spontaneous, his pictures are made possible by a combination of instinct, cunning and happy coincidence, revealing the beauty and significance of the everyday - what the rest of us see but don't notice, moments that vanish faster than the blink of an eye.

For his efforts, Stuart has picked up a little collection of pink stop-and-search slips, souvenirs of practising a century-old art form in a city increasingly paranoid and authoritarian. After 11 years, Stuart is something of an old hand. Using the street photographer's traditional tool of choice - the discreet and near silent Leica camera - he knows how to make himself invisible, make an image and move on. He rarely runs into trouble; when he does, he knows his rights.

Others aren't so adept. In the past year, the photography blogs have buzzed with tales of harassment, even violence. There's the war photographer who dodged bullets abroad only to be beaten up in his own South London backyard by a paranoid parent who (wrongly) thought his child was being photographed. There's the amateur photographer punched prostrate in the London Tube after refusing to give up his film to a stranger; the case of the man in Hull, swooped on by police after taking photographs in a shopping centre. “Any person who appears to be taking photos in a covert manner should expect to be stopped and spoken to by police ...” ran the Humberside force's statement.

Now, a new poster campaign by the Metropolitan Police is inviting Londoners to call a hotline if they don't like the look of a photographer. “Thousands of people take photos every day,” runs the text. “What if one of them seems odd?” The poster states that terrorists use cameras for surveillance. Life with a camera might be about to turn tougher.

“People need to understand the context,” Stuart says. “We've been mistaken for paparazzi and attacked since Princess Diana died. As far as the public's concerned, if you're a man with a camera you're probably a paedophile. And now, if we look ‘odd', we're also more than likely terrorists.”

To some, the very idea of covertly photographing strangers might seem “odd”, even distasteful. And yet a proportion of those same people will own a print of Robert Doisneau's Kiss by the Hôtel de Ville, or have sent greetings cards showing 1930s Paris, as recorded by Brassai. Street photography has given us a lot. More, perhaps, than we know.

Jeff Mermelstein is one of the art's great practitioners. He's been photographing New York since the 1970s and his book Sidewalk is a masterpiece. Speaking on a mobile phone from the street, he's concerned by London's poster campaign: “I think that's awful. Street photography is an important part of the documentation of our time. If that's discouraged, in the long term that will be a substantial loss. Some of the most significant images in any art medium in the last 150 years have been made in the street by people like Cartier-Bresson and Diane Arbus and Robert Frank.”

Street photography doesn't just document what our environment used to look like; it shows us how it really looks now, freezing the moment to reveal the weirdness and magic of the split second ... Stuart's photograph of a young dancer, in mid-air, upside-down, in Trafalgar Square ... Mermelstein's of a woman out walking her pet iguana. These images reveal the surreal in the real, force us to appreciate that our city spaces are collages of constantly shifting, surprising juxtaposition.

I ask Mermelstein whether he's ever hesitated before recording a complete stranger. He says he has ... “but I believe firmly that if something's in the public domain then one has the right to render them photographically. That if you're out on the street, you're in public.

“I try to avoid engagement,” he says. “It's very hard to explain to a layman in the midst of their anger that I'm a fine-art street photographer working in a grand tradition.”

Stuart dislikes the double standard that fights for the freedom to shoot documentary photographs of life in Iraq and Afghanistan but gets squeamish about invading privacy when recording our own cities. Instead, “the Sunday newspapers show aspirational images of what we'd like to be, not what we are.” But aren't there times when he'd rather not be photographed? “Living in London I'm filmed 300 times a day by CCTV, so I've got over that quickly.”

Sophie Howarth is a curator specialising in street photography. She says she's noticed - despite the difficulties - a boom for the art, enabled by technology, and with London at the centre. “In France, traditionally one of the great centres of street photography, the law now says you own the rights to your own image, so street photography's become a dead art. In London there's a growing community of photographers, using digi- tal technology, not just cameras, but blogs, too, to document the city and give each other instant feedback.”

And it's on these blogs that the Met's poster campaign has been getting reaction. There's a sense of anger and disappointment - suspicion, too - that the poster might be a stepping stone toward banning public photography. There's also humour, as photographers use their Photoshop skills to mock the poster. “Millions of people take photos every day,” says one. “Some of them are brown. Please do not shoot them.”

And, in a way, that's the point. Never stated, but clear nonetheless, is that Asian photographers and tourists are most likely to be affected day-to-day by this poster. For everybody else, it's about the cumulative damage done by suspicion.

Mermelstein was on the streets of New York on September 11, 2001. His images are among the most moving taken that day, arguably contributing significantly to our understanding of the grief and pain. But he's not impressed by the Met's campaign.

“I'm not going to belittle the issue of terrorism, but this is paranoia. And unfortunately, since Lady Di and now this link with terrorists, photography's seen by many people as something that's a little ... cheap.”

Stuart adds: “It seems to make the case that photographers are sneaky or sinister. It's irresponsible of the authorities to make life any harder for photographers. I think it was Elliott Erwitt who said, ‘I have never hurt anybody with a camera.' I go out there with a completely clean conscience; I don't have any worries about what I do. We all just want to be safe.”

Street photography on the net

www.in-public.com

A showcase of contemporary street photographers, including work by Matt Stuart, plus a “masters” section, featuring the brilliant and influential Joel Meyerowitz.

www.seconds2real.com

An international street photography collective, with a newsletter, and links to interviews by and films of masters of the art.

www.public-life.org

A German-based collective, including galleries, news and book reviews.

www.billcharles.com/merm/jeffmermelstein_1.htm

Work by Jeff Mermelstein, chronicler of New York.

www.magnumphotos.com

The world's most famous photographic agency includes work by some of the pioneers and masters of street photography, including Henri Cartier-Bresson and Elliott Erwitt.

Editor's choice

• Burning Bush with W
• Revolution at the new Saatchi Gallery
• Boy George on sex, drugs and Amy Winehouse