Research In Motion has promised India a technical solution for decoding encrypted BlackBerry data, a senior official said on Friday, a step that could allay Indian security concerns about the smartphone and avert a shutdown.

Indian authorities, who met with RIM officials on Friday, also pledged to go after other companies -- including Google and Skype -- to protect the country from cyber-spying and attacks planned over the Internet.

RIM faces an August 31 deadline to give authorities the means to read email and instant messages sent over the BlackBerry. New Delhi says it will pull the plug if RIM won't comply, threatening its future in the world's fastest-growing telecoms market.

India is the latest country to step up pressure on RIM, which has built the BlackBerry's reputation around confidentiality. Business professionals and politicians prefer the device. Governments, including Saudi Arabia, fear it could become a tool for terrorists or those breaking Islamic laws.

They have assured that they will come with some technical solution for Messenger and enterprise mail next week, said the senior Indian government source, who spoke on condition of anonymity. Our technical team will evaluate if it works.

After the meeting, Robert Crow, a RIM vice president, expressed optimism that the company would resolve India's worries. It is a step in a long journey, he said.

A spokeswoman for Waterloo, Ontario-based RIM could not be reached for comment.

RIM shares dropped about 2 percent in New York and Toronto. The stock has slipped more than 6 percent since the security issue flared two weeks ago.

It remains to be seen how much brinkmanship is involved. No country has carried through on threats to ban BlackBerry corporate email or messaging services.

India's demands follow a deal with Saudi Arabia, where a source said RIM agreed to give authorities codes for BlackBerry Messenger users. The United Arab Emirates, Lebanon and Algeria also seek access.

We don't expect a ban actually. There will be some solution before the deadline, said a senior official with a mobile phone operator in India, who did not want to be named.

India is keen to retain its position as one of the world's fastest growing information-technology nations, and a BlackBerry ban would jeopardize its status.

RIM also has a lot to lose. Competitors have eaten into its once-dominant share of the North American smartphone market, pushing the company to look to places like India and Saudi Arabia for growth.

A shutdown would affect about 1 million users in India out of a total 41 million BlackBerry users worldwide, allowing them to use the devices only for calls and Internet browsing

.

RIM, unlike rivals Nokia and Apple, operates its own network through secure servers located in Canada and other countries, such as Britain.

NATIONAL SECURITY

Concern over encrypted communications is acute in India. Pakistani-based militants used mobile and satellite phones in the 2008 attacks that killed 166 people in Mumbai. The militants were suspected of using Internet telephony.

The authorities have for more than a year been looking at Google's messaging, Skype and other providers of communication in India.

Wherever there is a concern on grounds of national security the government will want access and every country has a right to lawful interference, a senior interior security official, who declined to be identified, told Reuters.

India, like other countries, has been criticized for seeking blanket restrictions while mobile phone operators say they must offer consumers privacy and secure communications.

India has already forced mobile phone operators, including Bharti Airtel, to follow strict import rules when buying telecoms network equipment.

It has temporarily blocked China's Huawei Technologies and ZTE Corp from shipping network equipment on fears that it may have embedded spyware.

(Additional reporting by Devidutta Tripathy; Writing by Paul de Bendern and Frank McGurty; Editing by Alistair Scrutton and Janet Guttsman)

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