Researchers have developed new technology that could allow companies to implement hack-proof communications in three years.

The technology, based on quantum cryptography, was demonstrated by Toshiba Research Europe this week working over distances of 100km for the first time.

Research laboratory group leader Andrew Shields explained that the technology will be applicable for large organisations such as banks and government departments needing highly secure links between local sites.

"Delivering commercially available quantum cryptography will be a major weapon in the drive to ensure complete security for electronic communications," he said.

Quantum cryptography allows users on an optical network to guarantee security by encoding each transmitted bit with a single particle of light. Commercial products could be available in less than three years, according to Shields.

"Longer distances are possible, but it will take longer for us to overcome some of the inherent technical challenges," he said.

The Department of Trade and Industry (DTI) is partially funding further research into the technology by Toshiba, the University of Cambridge and Imperial College, London.

"This is a substantial achievement by a world leading UK team," said Ian Williams, programme manager for the DTI's LINK Optical Systems Programme.