The technology, based on quantum cryptography, uses a diamond to produce a single photon of light to stop information being intercepted, according to Dr Shane Huntington, University of Melbourne scientist and CEO of Quantum Communications Victoria (QCV).

The QCV program within the university's School of Physics has secured a A$9 million (US$7 million) deal with a consortium of quantum communication production and commercialization companies, including MaqiQ Technologies, Japan, Qucor Pty. Ltd., Sydney, and California-based SGI.

"Eavesdropping is a global problem which causes huge financial losses for security agencies [so] there is a critical need for Australia to keep up with the rest of the world in Internet security," Huntington said. Existing communications systems are not foolproof because hackers or eavesdroppers can extract information from optical links without users being aware of it, he added.

First-generation products will be for very secure transmission of secure datasets, like a bank's daily off-site backup, but could serve the commodity networking market in about 20 years, Huntington said. It's a low transfer rate but idea is not to send data [this way] but the encryption key so you don't need the same transfer rate. One of the consortium's goals is to enhance that as much as possible. If you can securely transfer the key you can transfer the rest of that data over a standard telco line, he said.

"We hope to have a prototype within three years," Huntington said. "It's not a stronger form of encoding, it's a new paradigm, so if someone steals the information you definitely know it's happened. If you're sending one photon at a time and one goes missing you know it."