The European Parliament's temporary committee last week held its first meeting to draw up a plan of action on how it will prove the Echelon 'spy system' exists, and what steps can be taken to limit its influence.

Fears over Echelon were first raised in a European Parliament report earlier this year, when Commissioner Erkki Liikanen said the UK and the US had denied the network was used for industrial espionage.

However, the European Union (EU) was not reassured and set up a temporary committee this July, giving it a year to verify the existence of Echelon and assess its compatibility with European law.

The 36-strong committee will look at whether the rights of European citizens are protected against the activities of the secret services and whether encryption is an adequate protection to guarantee privacy.

The committee will also examine whether European industry is put at risk by global interception of communications, and discuss how EU institutions can be made better aware of the risks posed by the activities of the secret services and what measures can be taken.

Following last week's meeting, the committee has determined which areas it will study and has requested that any businesses which think they have been targeted through the Echelon system to contact it.

EU officials told vnunet.com that a specially secured area within the EU network, with an extra firewall, had been isolated to confidentially store packet data relating to Echelon.

The committee said it will establish what is known about Echelon, what has been discussed about it in other parliaments, which intelligence agencies operate within the EU and which agencies might intercept communications systems.

The group will also look at what levels of protection encryption offers, what economic espionage has taken place, who has been targeted and whether they have protected themselves against further intrusions, and the legal position regarding privacy.