The arguments over whether several emerging nations can effectively hack BlackBerry devices give a rare glimpse of the shadowy world of state electronic surveillance already changing politics, espionage and business.

Saudi Arabia and the United Arab Emirates are both in dispute with Canadian smartphone maker Research In Motion, saying they want access to the encrypted phones to monitor security threats. Both are threatening to block its messenger function.

The row highlights a growing gulf between the idea of a free Internet and the desire by a growing number of authoritarian governments from China to Iran to control information and deepen surveillance to tackle dissent and insurgency.

Indian security agencies are also demanding access to BlackBerry messages as a condition for further expansion, saying they suspect militants used the handsets to help plan the 2008 Mumbai attack in which 166 people died.

Lebanon and Algeria are making similar demands.

It is part of a wider trend, said Jonathan Wood, global issues analyst at London-based consultancy Control Risks, which advises companies on security, corruption, politics and other issues.

After 9/11, you had this huge expansion of Western powers monitoring electronic communications for national security. Other countries are now catching up. The difference is they want to use it more broadly.

That could range from monitoring and thwarting millions of potential dissidents to gaining advantage in business deals -- a particular worry for Western firms sometimes in competition with state-backed companies.

Most countries say there are strict controls over authorizing electronic intercepts -- but it is often impossible for outsiders to tell how they are actually used.

It's obviously going to be a concern for Western business, said Wood. You have the risk that some of this information may be used for commercial purposes.

DOUBLE STANDARD?

The BlackBerry in particular has become a ubiquitous tool of bankers, company executives, political activists and diplomats. Its government-level 256-bit encryption is at the heart of its appeal.

BlackBerrys are used for planning everything from coffee meetings to debt restructuring and corporate mergers, from protest marches to romantic liaisons -- often as their jetsetting users travel casually through several countries.

Many firms in sensitive sectors already control use. Lockheed Martin said staff used BlackBerrys in the Gulf and elsewhere but with restrictions.

The corporation has rigorous standards and protocols on how we process and communicate sensitive information, spokesman Jeffrey Adams said. Cyber security is a global concern.

Some argue there is already a double standard. BlackBerry servers are located in the United States, Britain and Canada. Few doubt that intelligence agencies in those countries have access to them.

Perhaps as a result, France has banned its officials from using the devices. But most analysts say Western efforts have focused mainly on trying to use electronic intercepts to track a small number of militants, organized criminals and others including child pornographers.

Some emerging nations are clearly targeting political dissenters for whom cheap, hard-to-trace electronic communications have made organizing much easier.

When BlackBerry came, I started to get messages criticizing the government from people I'd never seen involved in activism, said UAE blogger Ahmed Mansour. Regular people started discussing taboo subjects.

Widespread unrest, coordinated on the Internet, after Iran's disputed election last year showed how social networking and microblogging sites such as Twitter could be used to mobilize opposition. Since then many countries have tightened controls and blocked websites such as Facebook and Twitter.

In the highest-profile row until now, Google angered Beijing earlier this year when it announced it would no longer comply with Chinese censorship rules.

It said its servers had suffered numerous cyber-attacks from China -- seen as keen to monitor dissidents over the Internet while limiting access to outside sites through its firewall.

All the major high-tech multinationals are pushing for a boundless global Internet, while authoritarian states across the board are increasingly interested in regionally based intranets where governments exert sovereignty over their own servers and routers, Ian Bremmer, president of political risk consultancy Eurasia Group, wrote in a note.

BEYOND THE SPOTLIGHT

Western intelligence agencies have also occasionally been tripped up by the new electronic world. Security experts were aghast last year when it emerged the wife of the new head of Britain's spy service MI6 had posted pictures of her husband, family and friends and other personal details on Facebook.

But normally, secrecy reigns. Bjoern Rupp, chief executive of secure phone manufacturer GSMK -- which supplies governments, celebrities and armed forces -- said the unusual feature of the Saudi and UAE BlackBerry dispute was its public nature.

The level of access spy agencies have to monitor BlackBerry messages has been at the heart of negotiations to roll out the devices around the world -- with RIM notoriously coy over what was agreed. Even without agreement, experts say there are ways intelligence agencies can break the BlackBerry's security.

An outright ban... is a very clumsy approach, Rupp told Reuters. Most countries with an active interest in monitoring their citizens' telecommunications act in a much more sophisticated and subtle way in order to keep such activities out of the public spotlight.

In Russia, rolling out BlackBerry took two years of negotiations and the agreement of the powerful state security agency the FSB, which was entitled to monitoring rights under anti-terror laws -- and demanded the servers be based in Russia. Expanding in China also took two years of security discussions.

In the Gulf, political activists say secure BlackBerry messaging hugely increased their ability to communicate with each other. If the service is blocked, they will simply switch to other tools such as encrypted Skype calls.

(BlackBerry) messaging was revolutionary for people here, said Abdel Hamid, a UAE lawyer and human rights activist. It awakened them. That's something I don't think will disappear.

(Additional reporting by Karen Jacobs Erika Solomon, Frederik Richter and Georgina Prodhan; Editing by Charles Dick)

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