EU probes Echelon

Menwith Hill in Yorkshire, part of the Echelon spy system

The European Parliament has voted to form a committee to investigate allegation that the US spy network, Echelon, is being used as a tool for industrial espionage.

We want to distinguish between what is real and what is fantasy

Carlos Coelho MEP

The system, which dates back to the Cold War, can intercept millions of telephone, fax and e-mail messages across the world every day.

The US has been accused of using Echelon to gain competitive advantage for its companies.

France has also ordered its counter-intelligence services to investigate the allegations.

A report to the European Parliament last October said Echelon played a part in helping the American Boeing company block attempts by the European Airbus consortium to break into the Saudi Arabian market.

Washington has denied the allegations, adding that most of the major powers engage in industrial espionage, including France.

Limited powers

The European parliamentary committee's powers to call witnesses will be limited, and observers say it is unlikely to get to the bottom of the Echelon controversy.

Echelon facts

Computers capable of recognising key words, names, telephone numbers and voices

Information gathered from listening posts stationed in the US, UK, Canada, Australia and New Zealand

Additional input from around 120 US satellites

Echelon evolved out of the Cold War espionage system set up by US and Britain

US media reports say former UK PM Margaret Thatcher used Echelon to spy on two of her ministers

"In addition to wanting to distinguish between what is real and what is fantasy, the commission will also try to ascertain how European citizens can see their privacy safeguarded," said Carlos Coelho, the Portuguese MEP expected to head the 36-person committee.

However, moves to set up a full committee of inquiry foundered on mainly British opposition.

France has in the past accused Britain of disloyalty to its European partners in co-operating with Echelon.

Politically motivated

Officials in Washington insist there are clear laws preventing US intelligence passing on information to individual companies, and that Echelon is used only for national security reasons.

However, a former head of America's intelligence service, the CIA, has suggested otherwise.

It is not immediately clear what the European Parliament investigations can achieve in legal terms.

European Parliament decision follows two years of concern

Echelon is, after all, an American Government body. But the investigation is likely to cause diplomatic tensions between Europe and the US.

Officials in Washington have hinted privately that the row over Echelon is politically motivated - part of broader tensions between the US and Europe, and an attempt to drive a wedge between Washington and London.

But critics argue that the controversy has shown once again that there is insufficient public oversight of intelligence gathering.

Echelon is dominated by the US, but also groups together the UK, Canada, Australia and New Zealand.