The United States is to relax restrictions on the export of sensitive computer encryption technology, in a move seen as vital to the development of internet-based commerce.

The Attorney General, Janet Reno, said the change would allow American industry to compete fairly in the international marketplace, while maintaining controls essential for national security.

Correspondents say encryption is the key to safe trading on the internet, where credit card and other personal details must be protected.

But many law enforcement officials argue that the new policy will make it easier for criminals and terrorists to conceal their activities. American software companies will still be required to submit details of who they sell encryption programmes to, and they remain prohibited from selling to certain foreign governments.