Text chats conducted using the Chinese version of Skype that contain keywords such as "Taiwan independence" and "Communist Party" are logged along with identifying IP addresses and usernames, then stored on insecure servers, a Canadian researcher said yesterday.

The practice may be part of the Chinese government's online censorship and cyber-surveillance efforts, the researcher concluded.

A Skype spokeswoman told The Wall Street Journal today that the filtering process in China had been changed "without our knowledge or consent and we are extremely concerned. We deeply apologize for the breach of privacy on TOM's servers in China and we are urgently addressing the situation with TOM."

A second Skype spokesman confirmed that statement as accurate, but declined to provide any additional information, citing an impending revised statement that the company planned to release later in the day.

In a report published yesterday, Nate Villeneuve, a security researchers with the Citizen Lab at the University of Toronto, outlined an investigation of TOM-Skype, the Chinese edition of the popular chat and VoIP software that was co-developed by the Chinese company TOM Online and Skype, a unit of eBay.

Villeneuve found eight servers comprising the TOM-Skype surveillance network, as well as others specifically set to monitor chat traffic from Internet cafes and TOM Online's wireless service. Those servers, said Villeneuve, contained massive log files that contained personal information about both TOM-Skype and Skype users, along with the complete contents of the chats that had been captured using keyword filtering.

The servers also stored records of voice-over-IP (VoIP) phone calls made with TOM-Skype, or to TOM-Skype users from people inside or outside China running the "normal" Skype. Those records, which went back to August 2007, included the IP addresses and usernames of callers.

Although Villeneuve blasted TOM-Skype for lax security practices; -- it left its servers unsecured and stored the encryption key needed to decrypt the logs on the same servers -- he saved most of the report to outline the surveillance aspects of what he had uncovered.

The TOM-Skype system scans for a wide range of keywords, including a large number that Villeneuve described as politically sensitive, such as "communist," "Taiwan independence," "democracy," "Tibet," and even "milk powder," the last a reference to the brewing scandal in China over adulterated milk products. Chats that contain such keywords are logged and their contents stored on the servers.

While the Chinese government is notorious for filtering Internet content -- blocking citizens from reaching certain Web sites, for example -- that doesn't seem to be the case here. "Based on an analysis of the messages in the content filter logs, it is clear that messages containing such keywords are being delivered to users," Villeneuve said in the report. "[This] may indicate that TOM-Skype is performing surveillance: logging messages containing keywords but continuing to display the messages to users."

And the chat spying may be far from impersonal. "Many of these messages contain words that are too common for extensive logging, suggesting that there may be criteria, such as usernames or who one has chatted with, or particular public chats, that determine how fine-grain the logging should be," Villeneuve said.

In the past, Skype -- which partnered with TOM Online in 2005 -- has acknowledged the Chinese text filtering, but claimed that censored messages were "simply discarded and not displayed or transmitted anywhere."

That's simply not true, said Villeneuve. "Not only are filtered messages transmitted to and stored on TOM-Skype servers located in China, but the servers themselves are configured with such poor security that it is possible to retrieve and decrypt these logs," he countered.

In his report, Villeneuve blasted Skype. "What is clear is that TOM-Skype is engaging in extensive surveillance with seemingly little regard for the security and privacy of Skype users," he charged. "This is in direct contradiction of Skype's public statements regarding their policies in China."

The report can be downloaded from the Information Warfare Monitor Web site, which currently is unavailable, possibly because of heavy demand.