Most Chinese who use Skype – or at least its Chinese version TOM-Skype – were thrilled to find a way to make free phone calls. There were also a few who were delighted to find a way to chat while circumventing the all-seeing eye of the state security. But today those few were scurrying to find a new way to communicate after it emerged that Skype’s Chinese partner had been archiving politically sensitive words and messages – and possibly even the identities of those whose conversations could be deemed sensitive.

The latest incident in which a US firm has become embroiled in controversy over monitoring of its operations in China was revealed by Citizen Lab, a group of computer security experts at the University of Toronto. It said this week that TOM Online was spying on TOM-Skype users in China and collecting messages with specific keywords.

The messages, with words such as "Tibet," "Communist Party", "democracy" and even “milk powder”, contained internet addresses, usernames and other information that could make the senders and recipients easily identifiable.

The report said that when a scan showed up these sensitive phrases, the messages and information, including usernames of subscribers, were stored on publicly accessible web servers along with an encryption key that could be used to unlock the data.

Skype, which prides itself on the security of its system, issued an apology and said the breach had now been fixed. Josh Silverman, president of the US online text message and voice service, issued a statement of concern. "It was our understanding that it was not TOM's protocol to upload and store chat messages with certain keywords, and we are now inquiring with TOM to find out why the protocol changed."

Both parties said they operated, like any other communications company in China, in line with established procedures to meet China’s laws and regulations.

Mr Silverman said: “We are currently addressing the wider issue of the uploading and storage of certain messages with TOM." He added: “Skype-to-Skype communications are, and always have been, completely secure and private."

But some users in China expressed doubt about just how secure their communications now were.

One dissident, who declined to be identified, said he only ever communicated by voice and always used Skype rather than the Chinese-language TOM-Skype. “It’s harder for me because I don’t speak English, but I still write messages in Chinese. However, I have always warned my friends to be very careful when they create an account to make sure they go onto Skype and are not directed to TOM-Skype. I just always thought the US one should be safer.”

The monitoring by TOM-Skype is not the first time concerns have been raised about surveillance and censorship in China, most recently during the Beijing Olympics. China exercises strict control over the internet, blocking sites linked to Chinese dissidents, the outlawed Falun Gong spiritual movement, the Tibetan government-in-exile and those with information on the 1989 Tiananmen massacre.

A number of US companies, including the tech giants Microsoft, Cisco, Google and Yahoo, have been hauled before the US Congress in recent years and accused of complicity in building what has been called the "Great Firewall of China". Skype has acknowledged since 2006 that its version in China, in a venture with Tom Online Inc, looks for certain sensitive words in text chats, and blocks those messages from reaching their destination. The issue appears only to affect people using the Chinese software. The dissident said: “But I’m also more and more nervous about using the U.S. version of Skype. I try not to write messages and I’m even not sure whether my conversations are being listened to.”

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