German police have expressed frustration about their inability to decipher the encryption used by Skype in order to tap into the VoIP calls of suspected terrorists.

Lawful interception (or wiretapping) of telephone calls has happened since before the time of rotary phones. In many countries, telecos must promise to allow wiretapping to be granted a license. VoIP services provided by software firms independent of ISPs complicate this picture.

"The encryption with Skype telephone software... creates grave difficulties for us," said Joerg Ziercke, president of Germany's Federal Police Office (BKA) at an annual gathering of security and law enforcement officials. "We can't decipher it. That's why we're talking about source telecommunication surveillance - that is, getting to the source before encryption or after it's been decrypted."

Ziercke's comments are an attempt to justify controversial German plans, yet to be legally approved, to develop "remote forensic software" (AKA a law enforcement Trojan). Proposals to give explicit permission for law enforcement officials to plant malware stem from a Federal Court ruling earlier this year declaring clandestine searches of suspects' computers to be inadmissible as evidence, pending a law regulating the practice.

The idea of a law enforcement Trojan has sparked a fierce civil liberties debate, as well as objections from the IT security community. German police are reportedly looking to hire two "specialists" to develop "white hat" malware. Ziercke's comments provide an insight into the sort of capabilities, such as capturing the raw output of microphones on compromised PCs, that these law enforcement Trojans ought to have.

Ziercke told reporters that it was not asking Skype to divulge its encryption keys or leave "back doors open" for law enforcement authorities, arguing that such requests would leave the eBay-owned VoIP firm at a competitive disadvantage to other services. "There are no discussions with Skype. I don't think that would help. I don't think that any provider would go for that," he said.