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By Kate Hanaghan, 14 March 2002 17:15

NEWS The Rupert Murdoch-owned company at the heart of the Canal Plus software piracy farrago is today being accused of funding the activities of hackers. Canal Plus claimed earlier this week that rival NDS, a News Corp subsidiary, used an Israeli lab to hack its smartcard codes, which are used to decrypt digital TV transmissions - an allegation NDS denies. But an email posted on a newsgroup appears to suggest that NDS had a long-standing relationship with hackers and funded their activities. The email, posted by someone known as 'hairymonster', was allegedly sent to an ex-member of hacker community The House of Ill Compute (THOIC), Lee Gibling. It apppears to have come from from NDS executive Mike Warren while still a member of THOIC. It reads: "Your expenses were signed by R.A. and have been taken by hand to Finance and received by them last Wednesday I asked that they were dealt with asap." NDS declined to comment when contacted by silicon.com this afternoon, but Margot Field, a spokeswoman for the company, was quoted in today's Guardian as saying: "Payments were made for information about hacking activities. It was a commercial arrangement to gather information. It is all part of normal intelligence gathering." THOIC members were outraged that some prominent figures in the forum might have been colluding with NDS. Some newsgroup postings appear to confirm the relationship between Gibling and NDS existed - or at least express concern that this may have been the case. One member of the forum, under the pseudonym 'hairymonster', sent out a warning to THOIC members via a newsgroup on 27 April 2001. It reads: "Every mail, every thread, every private message is logged on THOIC and sent to NDS on CD each week. If you continue to use it then so be it but do not say no one warned you." Another member added: "THOIC is run by NDS (who owns Sky) and they are using it to spy on the public who use it." The site was closed down soon after. Now NDS finds itself at the receiving end of a lawsuit which accuses it of industrial sabotage. It could cost it $1bn in damages.