It comes at a time when the UK is facing its gravest terror threat, including from “several thousand” Islamist extremists who are living here and want to attack the country, Mr Parker said.
He used his first public outing since taking over at MI5 to launch a scathing attack on the Snowden leaks.
It is feared around Whitehall that the revelations have resulted in a “guidebook for terrorists” while there is frustration that the American is being heralded as some kind of heroic whistleblower.
Sources find it incomprehensible that exposing spy agency techniques for tracking terrorists has been argued to be in the public interest.
Leaks from Snowden are known to contain at least 58,000 GCHQ files and it is feared there could be many more.
It also unclear whether foreign states have had access to the documents and it is understood the Guardian continued to expose the information despite pleas from the Government not to reveal intelligence techniques.
It is believed to be the worst leak of British intelligence files and to have caused the greatest damage.
In his first speech since becoming head of MI5 in April, Mr Parker did not specifically name Snowden or the Guardian.
But he said: “It causes enormous damage to make public the reach and limits of GCHQ techniques.
“Such information hands the advantage to the terrorists. It is the gift they need to evade us and strike at will.
“Unfashionable as it might seem, that is why we must keep secrets secret, and why not doing so causes such harm.”
He said the details of what capabilities the spy agencies have is their “margin of advantage” over the fanatics.
“That margin gives us the prospect of being able to detect their plots and stop them. But that margin is under attack,” he said.
He said reports from GCHQ were “vital to the safety of this country and its citizens”, adding: “We are facing an international threat and GCHQ provides many of the intelligence leads upon which we rely.”
Mr Parker said the UK is already facing its most complicated and unpredictable terror threat and that it was “getting harder” for his agents to protect against the diverse dangers.
With the spread of an al-Qaeda threat to more and more countries, the continue danger of Irish terrorism, the emergence of the lone wolf fanatic and advances in technology and cyber warfare, MI5 is now “tackling threats on more fronts than ever before”, he said.
In the speech to the Royal United Services Institute in London, Mr Parker said: “Our task is getting harder. The threats are more diverse and diffuse.
“And we face increasing challenges caused by the speed of technological change.”
And he warned: “It remains the case that there are several thousand Islamist extremists here who see the British people as a legitimate target.”
Among those are Britons, numbering in the low hundreds sources say, who have travelled to Syria, which is now a hotbed of extremism and terror groups, and since returned home.
The spy chief said: “For the future, there is good reason to be concerned about Syria.
“A growing proportion of our casework now has some link to Syria, mostly concerning individuals from the UK who have travelled to fight there or who aspire to do so.”
While the threat of a large scale terror outrage may have diminished it has not been removed, he said, while there is a growing risk of smaller attacks or individuals acting on their own.
Since 2011, a total of 330 people have been convicted of terrorism-related offences in Britain.
There is also the threat to Britons around the world, such as the attack on the In Amenas gas facility in Algeria and the recent Westgate shopping centre outrage in Nairobi, Kenya.
“Overall, I do not believe the terrorist threat is worse now than before. But it is
more diffuse. More complicated. More unpredictable,” he said.
There have been one or two major terror plots in the UK every year since 2000 and that pattern is “unlikely to change”.
And it was impossible to protect the public 100 per cent, he said, adding “life is not the movies”.
He said, because of its nature and terrible consequences, there was an expectation that there should be “zero” attacks but no crime can have such a target.
In a clear defence of any potential intelligence failings by MI5, Mr Parker also stressed there was a difference between “knowing of someone and knowing everything about them”.
“The idea that we either can or would want to operate intensive scrutiny of
thousands is fanciful,” he said,
“This is not East Germany, or North Korea. And thank goodness it’s not.”
He also made a defence for extended powers to monitor modern communications, the subject of recent controversy, saying “we cannot work without tools”.
He said the idea that the agencies would use such powers to monitor everyone’s private lives was “utter nonsense”.
Explaining why he made a public speech, he said it was important for spies to occasionally step out of the shadows to explain to the public the threats they face.
Snowden, 30, was a CIA analyst based in the US National Security Agency, who provoked one of the biggest intelligence leaks in American history.
He used his position to access and steal thousands of classified documents on US and related British spy programmes.
The leaks were revealed in a series of articles in the Guardian newspaper in June.
He fled the US and is currently being sheltered in Russia. (The Telegraph)