From a computer on the other side of the world, a terrorist is at work.

He is not making bombs or planning revolution. He might be remotely accessing the processing control systems of a cereal manufacturer to change the levels of iron and sicken and kill children innocently enjoying their food. He might attack air traffic control systems and cause the collision of two civilian aircraft. He could be doing anything. And he is almost impossible to trace.

Meanwhile, on another continent, two drug dealers exchange encrypted e-mails, sealing a deal to swap weapons for heroin.

It is scenarios like these that governments fear. Law enforcement agencies say that the electronic age has made crime more sinister - and criminals harder to catch.

Electronic messages plotting such crimes can be encrypted so that they are impossible to read.

What is encryption? Click here to find out!

To fight back, law enforcement agencies argue that everyone should store the keys to their encryption code with a third party that in turn will allow the government to access information if a crime is suspected.

The system, called key-escrow, would give police and other law enforcement bodies wide-ranging powers to intercept e-mail, read confidential documents and tap into systems, without monitoring by the courts.

The United States is leading the international charge to implement a key-escrow system.

In testimony before the US Senate Select Committee on Intelligence, FBI Director Louis Freeh said in January 1998 that without a key-recovery system, maintaining order would be impossible.

"Uncrackable encryption is now and will continue, with ever increasing regularity, allow drug lords, terrorists and even violent gangs to communicate about their criminal intentions with impunity and to maintain electronically stored evidence of their crimes impervious to lawful search and seizure.

"Other than some type of key-recoverable system, there is currently no viable technical solution to this problem for law enforcement," he said.

Britain's Labour Party had stated in its 1997 manifesto that "attempts to control the use of encryption technology are wrong in principle, unworkable in practice, and damaging to the long-term economic value of the information networks."

But now the Home Secretary, Jack Straw, agrees with EU ministers that law agencies must have access to encryption keys that are used to scramble information.