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The Home Office said that it is 'working closely' with the software company, following concerns that security features to be introduced in Windows Vista will increase the number of files that are routinely encrypted.

Its acknowledgement was prompted by comments made by Ross Anderson, professor of

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security engineering at Cambridge University, in evidence to the House of Commons Home Affairs Select Committee.

He said that by default data will be encrypted using a trusted platform module chip on a PC's motherboard.

'An unfortunate side effect for law enforcement is it would be technically fairly seriously difficult to dig encrypted material out of the system if it has been set up competently,' Professor Anderson explained.

Microsoft told the BBC that Vista is designed to be the most secure version of Windows ever.

'At the same time, we are working with law enforcement to help them understand its security features and will continue to partner with governments, law enforcement and industry to help make the internet a safer place to learn and communicate,' said a spokeswoman.