Australia has become the first country openly to admit that it takes part in a global electronic surveillance system that intercepts the private and commercial international communications of citizens and companies from its own and other countries. The disclosure is made today in Channel 9's Sunday program by Martin Brady, director of the Defence Signals Directorate in Canberra.

Mr Brady's decision to break ranks and officially admit the existence of a hitherto unacknowledged spying organisation called UKUSA is likely to irritate his British and American counterparts, who have spent the past 50 years trying to prevent their own citizens from learning anything about them or their business of ``signals intelligence'' - ``sigint'' for short. In his letter to Channel 9 published today, Mr Brady states that the Defence Signals Directorate (DSD) ``does cooperate with counterpart signals intelligence organisations overseas under the UKUSA relationship".

Together with the giant American National Security Agency (NSA) and its Canadian, British, and New Zealand counterparts, DSD operates a network of giant, highly automated tracking stations that illicitly pick up commercial satellite communications and examine every fax, telex, e-mail, phone call, or computer data message that the satellites carry.

The five signals intelligence agencies form the UKUSA pact. They are bound together by a secret agreement signed in 1947 or 1948. Although its precise terms have never been revealed, the UKUSA agreement provides for sharing facilities, staff, methods, tasks and product between the participating governments.

Now, due to a fast-growing UKUSA system called Echelon, millions of messages are automatically intercepted every hour, and checked according to criteria supplied by intelligence agencies and governments in all five UKUSA countries. The intercepted signals are passed through a computer system called the Dictionary, which checks each new message or call against thousands of ``collection'' requirements. The Dictionaries then send the messages into the spy agencies' equivalent of the Internet, making them accessible all over the world.

Australia's main contribution to this system is an ultra-modern intelligence base at Kojarena, near Geraldton in Western Australia. The station was built in the early 1990s. At Kojarena, four satellite tracking dishes intercept Indian and Pacific Ocean communications satellites. The exact target of each dish is concealed by placing them inside golfball like ``radomes''.

About 80 per cent of the messages intercepted at Kojarena are sent automatically from its Dictionary computer to the CIA or the NSA, without ever being seen or read in Australia. Although it is under Australian command, the station - like its controversial counterpart at Pine Gap - employs American and British staff in key posts.

Among the ``collection requirements" that the Kojarena Dictionary is told to look for are North Korean economic, diplomatic and military messages and data, Japanese trade ministry plans, and Pakistani developments in nuclear weapons technology and testing. In return, Australia can ask for information collected at other Echelon stations to be sent to Canberra.

A second and larger, although not so technologically sophisticated DSD satellite station, has been built at Shoal Bay, Northern Territory. At Shoal Bay, nine satellite tracking dishes are locked into regional communications satellites, including systems covering Indonesia and south-west Asia.

International and governmental concern about the UKUSA Echelon system has grown dramatically since 1996, when New Zealand writer Nicky Hager revealed intimate details of how it operated. New Zealand runs an Echelon satellite interception site at Waihopai, near Blenheim, South Island. Codenamed ``Flintlock", the Waihopai station is half the size of Kojarena and its sister NSA base at Yakima, Washington, which also covers Pacific rim states. Waihopai's task is to monitor two Pacific communications satellites, and intercept all communications from and between the South Pacific islands.

Like other Echelon stations, the Waihopai installation is protected by electrified fences, intruder detectors and infra-red cameras. A year after publishing his book, Hager and New Zealand TV reporter John Campbell mounted a daring raid on Waihopai, carrying a TV camera and a stepladder. From open, high windows, they then filmed into and inside its operations centre.

They were astonished to see that it operated completely automatically.

Although Australia's DSD does not use the term ``Echelon'', Government sources have confirmed to Channel 9 that Hager's description of the system is correct, and that the Australia's Dictionary computer at Kojarena works in the same way as the one in New Zealand.

Until this year, the US Government has tried to ignore the row over Echelon by refusing to admit its existence. The Australian disclosures today make this position untenable. US intelligence writer Dr Jeff Richelson has also obtained documents under the US Freedom of Information Act, showing that a US Navy-run satellite receiving station at Sugar Grove, West Virginia, is an Echelon site, and that it collects intelligence from civilian satellites.

The station, south-west of Washington, lies in a remote area of the Shenandoah Mountains. According to the released US documents, the station's job is ``to maintain and operate an Echelon site''. Other Echelon stations are at Sabana Seca, Puerto Rico, Leitrim, Canada and at Morwenstow and London in Britain.

Information is also fed into the Echelon system from taps on the Internet, and by means of monitoring pods which are placed on undersea cables. Since 1971, the US has used specially converted nuclear submarines to attach tapping pods to deep underwater cables around the world.