Report reveals China-based cyber spying ring

A Chinese spying operation has obtained sensitive data from hundreds of government computers in more than 100 countries, according to a new report.

University of Toronto experts found 1,295 infected computers around the world and observed the operation stealing documents and watching and listening to users through webcams and microphones.

The report will spark fresh alarm about the extent of information warfare and, in particular, about Chinese hacking. The high proportion of 'high-value' infections suggested the existence of a targeted spying operation rather than a criminal network.

The researchers could not establish that the Chinese government was behind the hacking effort - dubbed GhostNet - but they noted that the targets were groups of particular interest to ­Beijing, including Tibetan independence activists.

Among the 1,295 infected machines, 397 were "either significant to the relation between China and Tibet, Taiwan or India, or were identified as computers at foreign embassies, diplomatic missions, government ministries or international organisations", the report said.

Triggered by a request from the Tibetan government in exile, the 10-month investigation found that several computers in the office of the Dalai Lama had been infiltrated by malware, virus-like software that hijacks a machine and makes it obey commands from the attackers.

The report said circumstantial evidence suggested that the Chinese state had exploited this set of high­profile targets for "military and strategic-intelligence purposes". It said many attacks appeared to come from Hainan island, home of the Chinese military's Lingshui signals intelligence facility.

Dennis Blair, the new US director of national intelligence, on Friday said cyber-security was a "very high priority". He said organised states, such as China and Russia - and not Muslim terrorist organisations - posed the biggest threat, and said the US needed to be better at identifying where attacks originated.

"China is I think winning the sweepstakes for the origin of the most attacks on US organisations. I think it's second, after attacks originating in the United States, but it's up there in terms of foreign countries," he said.

Barack Obama, the president, has ordered a review of cyber-security as US government agencies increasingly fall victim to attacks. In 2007, Chinese military hackers penetrated the Pentagon computer network serving Robert Gates, the US defence secretary. Hackers originating from China last year broke into the White House computer system.

Other countries, including the UK and Germany, have warned about Chinese attacks on their government networks. Eliza Manningham-Buller, former head of MI5, the British intelligence agency, has said the UK had been the target of Chinese attacks that appeared to be state sponsored.

A spokesman for the Chinese consulate in New York described the study as "nonsense" to The New York Times, which reported it at the weekend.

Copyright The Financial Times Limited 2009