The Government aims to build public trust in trading on the Internet while sweeping away legal barriers that have impeded the progress of Britain's burgeoning e-commerce sector.
Presenting the paper yesterday, the trade minister Michael Wills said: "The way we do business in the future is set to change dramatically. It is vitally important that this country plays an important part in this process and does not get left behind."
The paper proposes to remove legal barriers to using electronic "signatures" instead of pen and paper for everyday dealings. It also aims to build public confidence that credit card details cannot be read when consumers shop on-line and that the confidential information of businesses is protected on the Internet."
The paper focuses on technology that now allows messages to be signed electronically and then scrambles the details using a code that only the designated recipient can be read.
The paper is seeking views on a number of issues. They include:
n Establishing a voluntary licensing system for businesses such as banks, the Post Office and BT, that are ready to provide the encryption service;
n Setting the criteria which licensees will have to meet;
n Updating the law so that contracts can be signed electronically not just on paper;
n Establishing methods whereby law enforcement authorities can gain access to encrypted data if there is a perceived risk of criminal activity.
The Government has set up a task force consisting of government and industry figures to come up with detailed proposals on how some of these issues of privacy can be resolved. It is seeking responses by 1 April.