A Chinese-language version of Skype scans users' chat messages for keywords such as "democracy," and sends a copy of the offending message to the company's servers, according to a report released Thursday by a Canadian online human rights group.

That's despite adamant claims by the Ebay-owned company that its software offers encrypted, safe communication.

Nart Villeneuve of the University of Toronto's Citizen Lab found that a Chinese version of the popular chat and internet phone-call software sent the full text of millions of messages with 'sensitive' keywords to servers controlled by Skype's Chinese partner TOM Online.

Captured messages discuss sensitive topics such as Taiwanese independence, tainted milk and the banned Falun Gong group.

Villeneuve used forensic software to watch how the TOM-Skype software communicated, and noticed that the software sent an encrypted message to an unknown server whenever he typed in an English curse word.

Following the electronic breadcrumb trail, Villeneuve found the servers belonged to TOM-Skype. The servers were not secure and he was able to download both the logs and the key to decrypting them.

He claims to have found millions of communications, including undisguised communications from Falun Gong members. Political activist groups often recommend using Skype because the company promises that all messages and phone calls are protected by end-to-end encryption.

While that may be the case, the TOM-Skype software bypasses that protection by checking a text message against a secret keyword list either before or after the message is encrypted. If found, the software would send an encrypted copy to TOM-Skype's own servers.

The message is clear, even if the extent of Skype's complicity is not, Villeneuve wrote in his report, Breaching Trust:

Trust in a well-known brand such as Skype is an insufficient guarantee when it comes to censorship and surveillance. This case demonstrates the critical importance of the issues of transparency and accountability by providers of communications technologies. It highlights the risks of storing personally identifying and sensitive private information in jurisdictions where human rights and privacy are under threat.

Villeneuve also found chat messages stored on the servers that had no such keywords, leading him to believe the system also has the ability to target individual users based on their handles.

Since 2006, the software has been known to hide messages that contain sensitive keywords, but Skype has denied that there are any backdoors or reporting mechanisms in the software.

Skype did not immediately respond to a request about the truth of the report's accusations or whether Skype knew about or designed the backdoor.

Skype's president Josh Silverman responded Thursday in a blog post, writing that everyone knows China censors – but that Skype didn't know about the copying of messages to TOM Online's serers.

In April 2006, Skype publicly disclosed that TOM operated a text filter that blocked certain words in chat messages, and it also said that if the message is found unsuitable for displaying, it is simply discarded and not displayed or transmitted anywhere. It was our understanding that it was not TOM's protocol to upload and store chat messages with certain keywords, and we are now inquiring with TOM to find out why the protocol changed. [...] Allowing the world to communicate for free empowers and links people and communities everywhere. Our challenge is to bring this valuable service to people all over, including China, while being transparent to our users and staying within the boundaries of the local laws.

Skype is owned by eBay, which bought the popular online communication company for more than $2.5 billion in 2005.