The Crown Prosecution Service (CPS) is gathering evidence on BT's covert trials of Phorm's ISP-level adware system to help it judge whether it is in the public interest to allow a private prosecution for breach of wiretapping laws.

CPS lawyers have asked to see the file handed to City of London police in summer.

After interviewing BT executives in September this year, the financial district's force declined to bring charges. It said that the tens of thousands of customers whose communications were hijacked and profiled during two tests in 2006 and 2007, which were revealed by The Register , had given implicit consent.

Frustrated campaigner Alex Hanff then wrote to the CPS for leave to bring a private prosecution under the Regulation of Investigatory Powers Act 2000. A CPS spokeswoman confirmed on Wednesday that the Complex Casework Centre is working on the case.

The file handed to police included BT's internal technical report from 2006, which we obtained earlier this year. It describes the the first trial as "stealth" and says customers were not told their wire was being tapped "as one of the aims of the validation was not to affect their experience".

The CPS will determine whether there is sufficient evidence the secret testing was against the law and whether it would be in the public interest to bring a case to court. The file will then pass to the Director of Public Prosecutions Keir Starmer QC, who will have final say. If he gives consent, the prosecution will be brought by CPS lawyers, despite being a "private" prosecution. Such trials are very rare.

The CPS spokeswoman was unable to estimate how long the process will take, but several months is not unheard of. She said it was likely deliberations would again focus on the question of whether BT and Phorm had any consent to intercept traffic.

BT has always maintained it took legal advice that the trials were legal and always declined to produce that advice or give any details of its basis.

Meanwhile, the European Commission is considering the Department for Business, Enterprise and Regulatory Reform's response to its second letter asking for an explanation of why no action has been over the trial. A Brussels spokeswoman said the UK responded to the October 6 letter on November 13. The second EU letter contained "detailed questions on how the UK authorities have protected the privacy of UK citizens with regard to Phorm in the past, and how they intend to do so in the future," she said.

"The Commission is currently analysing the response."

If the Commission believes authorities failed to enforce European privacy directives it could bring a case against the UK at the European Court of Justice in Luxembourg. ®