After the reported attempt to steal £220 million from the London office of Sumitomo bank, Times Online examines the phenomenon of keylogging. Should we all be worried?

What is keylogging?

Keylogging involves using a piece of software - or a piece of hardware - to monitor and record every keystroke entered at a computer terminal, including its time and date. That includes passwords, credit card details and, in one celebrated case, the entire source code for a high-profile computer game. It's also sometime known as "sniffing".

What happened in the Sumitomo case?

Very little has been divulged about the attempted theft from the Sumitomo bank, although had it worked it would probably have been the biggest cybercrime ever. The thieves either hacked into Sumitomo's computer system and hid the keylogging 'spyware' on it or had physical access to those computers - which might imply some kind of inside job.

The National High-Tech Crime Unit has been following the case since last October, however, which suggests that Sumitomo's own security system picked up on the attempted theft in plenty of time. The company says it has lost no money in the attempted theft.

How do the hackers get hold of these programmes?

It's not just hackers - anyone can buy these programmes over the internet for under $20, allowing you to monitor your employees, your children or your spouse. Some US firms have used them to monitor employees' web usage for years.

They are particularly dangerous when coupled with Trojan software, allowing the information collected to be sent over the internet directly to the hacker.

How long has the technology been around?

As early as the 1960s, military intelligence organisations discovered that computer screens emitted radio waves that could be intercepted from afar and reassembled as text - showing the eavesdropper what was on the screen. In his book Spycatcher, Peter Wright, a former M15 scientist, recalled how British Intelligence discovered such emissions when trying to hack the code-making machines of the French. London wanted to know if Paris would block Britain's entry to the European Economic Union. Mr Wright picked up a faint signal alongside the encoded transmissions: it turned out to be the wording of the message as it had been typed in.

The FBI has its own version, known as Magic Lantern. Under the Patriot Act, passed after the September 11 attacks, government officials are allowed to enter your premises and install the software - or they can hack in to your system or plant it remotely - so they can follow everything you are doing on your computer, stroke-by-stroke.

Should I be worried?

If you are a home computer user or us a computer to run your business, you should take precautions. A proper firewall will help, as will up-to-date anti-virus protection. You can also buy anti-spyware programmes that will increase your protection.

But the experts say that the single most important step is not to download anything from a website you don't totally trust. If you do, you might have downloaded software along with it.

One UK company, Deepnet Technologies, is soon to release an internet browser that is designed to warn you if any attempt is being made to log your keystrokes. The browser will use proactive technology, searching out spyware, rather than relying on a "signature database" of known programmes.

David Sherwin, an international fraud investigator with Ernst & Young, said today: "You can buy bespoke programme to make it more difficult, but will you ever make it impossible for fraudsters to do this? I suspect not. But the most important thing is to make it very difficult for a fraudster. If you just leave your door open, then someone will just walk in."

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