CODE PLAN URGED TO SECURE NET : DIGITAL KEYS WOULD BE FILED WITH GOVERNMENT.

Byline: Elizabeth Weise Associated Press

Internet users would be asked to give the government the digital ``keys'' to their computers in exchange for greater security when doing business on line under a White House draft proposal.

The plan would help ensure secure on-line communication, which is essential if the Internet is to become a commercial marketplace, officials say.

The plan calls for the development of an encryption system that would let Americans - from individuals to companies to universities - transact business on line without worrying about someone stealing their credit card number or otherwise invading their privacy. Their transactions would be protected by an unbreakable code.

In return, however, the government is seeking possession of the encryption keys that are necessary to decipher the code. Otherwise, it fears terrorists and other criminals might use such codes without fear of getting caught.

The encryption keys would be available to law enforcement authorities, who could obtain them via a warrant in the same way they now can tap telephones.

That prospect alarms some Internet users.

``Nobody's going to give up that kind of control,'' said Jim Bidzos, president and chief operating officer of RSA Data Security of Redwood City, Calif.

In addition to complaining about the risk to privacy, Internet users say the central bank of key codes would become the ultimate target for computer hackers. The database ``would be like a big bull's-eye,'' said Marc Rotenberg of the Electronic Privacy Information Center in New York.

The Clinton administration's draft policy paper was released by the Office of Management and Budget on Tuesday. The administration hopes to produce a report on how to move forward with the security plan within six months.

The best on-line security method yet devised is a mathematical system called public key cryptography. In public key systems, a mathematical process generates two related ``keys'' for each individual - one public, one secret. A message encrypted with one key can only be decrypted with the other.