VoIP provider Skype's encryption creates serious problems for law enforcement, according to the president of Germany's Federal Police Office (BKA) Jörg Ziercke.

BKA experts can not decipher telephone conversations relayed by the popular VoIP service said Ziercke, meaning that they have to intercept the conversations at the source, before they are encrypted, or at the receiver, after they are decrypted.

Because of these encrypted communications, European authorities have been lobbying for legal online searches of computer hard drives using spyware. In Germany, the introduction of a government Trojan is still being discussed.

The government trojan is a "technical still birth" and will not work as the authorities imagine, said Günther Wiesauer, CEO of the security company Underground 8. There would be too many players who would work to prevent PC infections: "To start with, the operating system manufacturers are already integrating defence techniques which prevent the installation of malware. On top of that the firewall is still in the way of attackers," he said.

The US, on the other hand, have a working method of Internet surveillance. Using the spy network Echelon, the US intelligence agency can observe all data traffic sent or received by an IP address. The system sits on a central Internet node and is thus able to monitor all of the IP communications -- Web sites visited, e-mail, chat and much more. Technically this would also work in Europe, but data privacy laws make it infeasible, according to Wiesauer.