A Canadian researcher recently discovered that a Chinese version of eBay's Skype communications software allows Chinese officials to snoop on text chats containing certain keywords, such as "democracy." The news is not only of interests to Chinese rights groups and those who monitor internet censorship, but it also is likely to capture the interest of law enforcement and intelligence agencies who have been bothered by the growing use of Skype.

Skype currently claims 338 million users across the world, and has proven difficult to wiretap. Calls and chats made through Skype are done between computers over the Internet, and its contents are supposedly encrypted. This has raised concerns within the law enforcement community that Skype might let criminals communicate without the fear of eavesdropping.

In the United States, the FBI has argued for applying current US wiretapping law to Internet phone calls. They were able to get a favorable court ruling in 2006, but it is still not clear whether it applies to systems like Skype that skip traditional telephone networks.

Security experts and privacy are also concerned that Skype has some kind of "back door" that allows for eavesdropping, while at the same time presenting a front to users that it is a secure channel of communication. People have been suspicious for a couple years now that Skype pretends to be secure, but actually is not.

Nart Villeneuve at the University of Toronto revealed on Wednesday that a Chinese version of Skype's software is being used for surveillance of text messages. Skype has acknowledged since 2006 that this version looks for certain words in text chats and blocks those messages from reaching their destination.

The issue appears to affect only those using the Chinese version of the Skype software. But what is troubling about what Villeneuve found was that the software also passes messages caught by the filter to a cluster of servers. Due to poor security on the servers, he was able to retrieve more than a million stored messages. The filters, he says, appear to look for words such as "democracy", "Tibet", and "milk powder", amongst others.

Villeneuve's finding of the stored messages contradicts a blog post on Skype's website which says that the software gets rid of the filtered messages, and neither displays or transmits them anywhere.

Skype president Josh Silverman said that they learned of the message diversion only on Wednesday, and quickly acted to fix the security issues.

It is not the first time that Skype has given contradictory statements regarding the issue of eavesdropping. They told the AP that it "cooperates fully with all lawful requests from relevent authorities", but when asked by CNET in June about whether it could accomodate a wiretapping request, they gave a different answer. Skype told CNET that they could not, because of the way the system works: calls are encrypted, and only the two computers at each end have keys to decrypt them.

On Thursday Skype spokeswoman Jennifer Caukin said "since its inception in 2003 Skype has never created a back door to the Skype software."

Software and security experts, however, believe that a back door might not even be neccessary. One said that they could thing of "five or six" different ways of eavesdropping on Skype, and that "it's not that hard." Some suggest that although Skype might not be getting subpeonas to hand over information or allow authorities access, they may be voluntarily cooperating. That could explain the law enforcement community's relative silence on the issue - why complain when they're already helping you out?

German technology site Heise Online reported back in July of this year that Austrian officials claimed that they were able to listen to Skype conversations.