Indian officials ignored, played down and refuted a suggestion by US officials about Indian Y2K (Year 2000) software firms being involved in smuggling in computer codes which were a threat to US security.

According to Reuters and news posted on the website wired.com -FBI officials have informed news agencies that certain malicious code changes have also been incorporated as part of Y2K modifications and had begun to show up in some US work undertaken by foreign contractors. These were seen as possible economic and security threats.

A Central Intelligence Agency officer assigned to the National Infrastructure Protection Centre (NIPC) said in a recent article that India and Israel appeared to be the "most likely sources" of malicious code. It was felt that it was quite easy for outsiders to plant codes to gain future access or cause some trouble in future.

It was noted that countries like Ireland, Pakistan and the Philippines were among those whose firms did a bulk of the Y2k solutions.

Indian firms have done more than $2 billion worth of coding work for Y2K solutions.

Montek Singh Ahluwalia, chairman of the Indian government's Y2K Action Force said, "I think this is an utterly ridiculous assertion ... without, as far as I can see, any basis whatsoever". He added that he had no idea if the report was factually correct and if indeed a responsible officer has made what appears to be an irresponsible statement.

He said the Indian government had not received any official communication to suggest wrongdoing by Indian firms or agencies.

Dewang Mehta, president of National Association of Software and Service Companies (NASSCOM), said that too much was at stake for India's software companies. Y2K solutions have enabled Indian companies to gain long-term clients and make the Indian software industry the boom sector that it is today. Besides, the bulk of Y2K work was done at US sites under client supervision, he added.

He said Indian firms had also carried out "regression testing," to ensure that these Y2K solutions did not hamper other software in client systems. Mr Mehta said he had heard during a recent visit to Israel a rumor about a computer virus designed to wipe out Y2K solutions.