The European Commission has taken a step forward in the promotion of electronic business with the award of a contract to develop a secure, panEuropean e-business network.

The project, expected to be operating by next month with a control centre in Brussels, will be to demonstrate in a "live" environment the advantages of secure electronic transmission of information which would otherwise have been handled in paper form.

The contract has been won by the London-based technology arm of the consultants, PricewaterhouseCoopers (PwC). The price has not been disclosed. Mr Alastair MacWillson, the PwC partner for technology risk services, said the contract set a precedent for e-business services across Europe.

It will make it possible for companies from all 15 member-states to submit research proposals in complete security over the Internet to the Commission's science and technology directorate.

Businesses using the system are expected to benefit from improved efficiency, speed and cost savings. The Commission has already made it clear it wants to see 25 per cent of its purchasing to take place electronically by 2003.

At present this ambition is being thwarted by the difficulty of carrying out transactions in a secure environment. In addition, legal and systems differences across the member-states have made transactions difficult.

Under the terms of the contract, the Commission will take on the role of "trusted party", guaranteeing the security and integrity of transactions with PwC in the role of certification service provider.

It will encrypt data to ensure it is unintelligible if intercepted and make use of electronic signatures to guarantee the integrity of a document and the authenticity of its origin. With the system, PwC says, transactions cannot be repudiated later.