The National Security Agency has reportedly planted secret radio wave software in nearly 100,000 computers across the world that allows it to spy on those machines.
Most of the software is inserted by gaining access to computer networks, but the US spy agency has increasingly made use of a technology that allows it to enter computers not connected to the internet, The New York Times reported.
NSA documents, computer experts and US officials cited by the paper said the technology could be used to create a digital highway for launching cyber attacks.
It has been used by the agency since 2008, and relies on radio waves that can be transmitted from tiny circuit boards and USB cards secretly inserted into computers, the paper said.
In some cases, they are sent to a briefcase-size relay station that intelligence agencies can set up miles away from the hacked computer.
The agency's main target has been China's military forces, but it has also used the technology to spy on the Russian military, drug cartels, the European Union, and sometime US allies such as Saudi Arabia and India, it is claimed.
NSA spokeswoman Vanee Vines insisted the technology has not been used to target computers in the US.
Parts of the spy programme were leaked by whistleblower Edward Snowden"NSA's activities are focused and specifically deployed against - and only against - valid foreign intelligence targets in response to intelligence requirements," she said in a statement.
"We do not use foreign intelligence capabilities to steal the trade secrets of foreign companies on behalf of - or give intelligence we collect to - US companies to enhance their international competitiveness or increase their bottom line."
Parts of the programme were disclosed in documents leaked by NSA whistleblower Edward Snowden.
The Times said it withheld some of those details - at the request of US intelligence chiefs - when it reported on American cyber attacks on Iran last summer.
The US regularly accuses China of launching attacks on American industrial and military targets, often to steal secrets or intellectual property.
When Chinese hackers have placed similar software on US computer systems, American officials have protested, the newspaper said.
Zhu Feng, an international security expert at Peking University, said: "Those spying activities show that the US says one thing while doing another thing, and the spying activities are being conducted in an irregular way without rules.
"Other countries may follow suit, leading to a fierce arms race on the internet. So, it is time to set up rules and regulations in cyberspace with co-ordination from the international community."
:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.
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