The European Union is to invest €11 million over the next four years to develop a secure communication system based on quantum cryptography, using physical laws governing the universe on the smallest scale to create and distribute unbreakable encryption keys, project coordinators said on Monday.

If successful, the project will produce the cryptographer's Holy Grail – absolutely unbreakable code – and thwart the eavesdropping efforts of espionage systems such as Echelon, which intercepts electronic messages on behalf of the intelligence services of the US, Britain, Canada, New Zealand and Australia.

"The aim is to produce a communication system that cannot be intercepted by anyone, and that includes Echelon," said Sergio Cova, a professor from the electronics department of Milan Polytechnic and one of the project's coordinators.

"We are talking about a system that requires significant technological innovations. We have to prove that it is workable, which is not the case at the moment." Major improvements in geographic range and speed of data transmission will be required before the system becomes a commercial reality, Cova said.

"The report of the European Parliament on Echelon recommends using quantum cryptography as a solution to electronic eavesdropping. This is an effort to cope with Echelon," said Christian Monyk, the director of quantum technologies at the Austrian company ARC Seibersdorf Research GmbH and overall coordinator of the project. Economic espionage has caused serious harm to European companies in the past, Monyk said: "With this project we will be making an essential contribution to the economic independence of Europe."

Light fantastic
Quantum cryptography takes advantage of the physical properties of light particles, known as photons, to create and transmit binary messages. The angle of vibration of a photon as it travels through space – its polarization – can be used to represent a zero or a one under a system first devised by scientists Charles Bennett and Gilles Brassard in 1984. It has the advantage that any attempt to intercept the photons is liable to interfere with their polarization and can therefore be detected by those operating the system, the project coordinators said. An intercepted key would therefore be discarded and a new one created for use in its place.

The new system, known as SECOQC (Secure Communication based on Quantum Cryptography), is intended for use by the secure generation and exchange of encryption keys, rather than for the actual exchange of data, Monyk said.

"The encrypted data would then be transmitted by normal methods," he said. Messages encrypted using quantum mechanics can currently be transmitted over optical fibres for tens of kilometers. The European project intends to extend that range by combining quantum physics with other technologies, Monyk said. "The important thing about this project is that it is not based solely on quantum cryptography but on a combination with all the other components that are necessary to achieve an economic application," he said. "We are taking a really broad approach to quantum cryptography, which other countries haven't done."

Experts in quantum physics, cryptography, software and network development from universities, research institutes and private companies in Austria, Belgium, Britain, Canada, the Czech Republic, Denmark, France, Germany, Italy, Russia, Sweden and Switzerland will be contributing to the project, Monyk said.

In 18 months project participants will assess progress on a number of alternative solutions and decide which technologies are the most promising and merit further development, project coordinators said. SECOQC aims to have a workable technology ready in four years, but will probably require three to four years of work beyond that before commercial use, Monyk said.

Cova was more cautious: "This is the equivalent of the first flight of the Wright brothers, so it is too early to be talking already about supersonic transatlantic travel."

The technological challenges facing the project include the creation of sensors capable of recording the arrival of photons at high speed and photon generators that produce a single photon at a time, Cova said. "If two or three photons are released simultaneously they become vulnerable to interception," he said.

Monyk believes there will be a global market of several million users once a workable solution has been developed. A political decision will have to be taken as to who those users will be in order to prevent terrorists and criminals from taking advantage of the completely secure communication network, he said.

"In my view it should not be limited to senior government officials and the military, but made available to all users who need really secure communications," Monyk said. Banks, insurance companies and law firms could be potential clients, Monyk said, and a decision will have to be made as to whether and how a key could be made available to law enforcement authorities under exceptional circumstances. "It won't be up to us to decide who uses our results," said Milan Polytechnic's Cova.