German police have complained that the encryption of VoIP traffic has made tracking criminals very difficult.
Jöerg Ziercke, president of Germany's Federal Police Office, told an annual gathering of security and law enforcement officials that Skype is giving the force more problems that traditional telephone tapping.
"The encryption with Skype telephone software creates grave difficulties for us," he told Reuters.
"We cannot decipher it. That is why we are talking about source telecommunication surveillance, i.e. getting to the source before encryption or after it has been decrypted."
Ziercke added that he does not expect Skype to hand over encryption keys or take any action that would harm it as a business, but that there remains a need for police to examine hard drives and break encryption.
Germany has tough laws on the searching of personal data passed after World War 2.
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An official announcement is expected soon
Issue demonstrates the importance of digital rights management