Web users in Iran and Syria aiming to circumvent censorship controls are being targeted with spyware, according to security researchers.
A team at the University of Toronto said installation software for the popular proxy tool Simurgh also implanted keylogging spyware.
Simurgh is designed to anonymise net use and allow access to blocked sites.
However, an added Trojan is said to send data from victims' PCs to a site registered with a Saudi Arabian ISP.
This can include the computer operator's username and machine name, as well as every window clicked and every keystroke entered.
The developers of Simurgh subsequently posted a warning on their website noting that versions of their software installer downloaded from the file sharing service 4shared had been compromised.
Anti-virus firms Sophos and Avira have also updated their malware scanners to detect the code.
Morgan Marquis-Boire, a technical adviser at the university's Munk School of Global Affairs, said the Isass.exe file allowed "persistent access to the victim's computer" as well as "data exfiltration" capabilities.
"This Trojan has been specifically crafted to target people attempting to evade government censorship," he added.
Simurgh is an Iranian stand-alone proxy software for Microsoft Windows.
It was created following the Iranian presidential election in 2009 and has been used by people inside the country to bypass censorship.
The name Simurgh comes from Persian mythology and symbolises a fantasy bird.
The proxy software runs without the need for administrator privileges and is often shared and installed via USB flash drives at internet cafes, allowing citizens access to otherwise blocked information online.
It has recently been reported that the software has also circulated among Syrian internet users.
It is not clear who is behind the Trojan but it seems it has been created specifically to target people attempting to evade government censorship.
"If found to be installed on a computer one must consider all online accounts (email, banking etc) to have been compromised and it is advised that all online passwords be changed as soon as possible."
He noted that a side effect of the code was a lack of navigation sounds in Microsoft's Internet Explorer and other applications.
A follow-up post by Sophos noted that although the data was being sent to what appeared to be a Saudi Arabian registered entity, some of the servers being used were in the United States.
Sophos stressed that the discovery did not mean that the attack had been instigated by parties in the US, as anyone could have rented the server space.
The news comes as investigators probe a malware attack - dubbed Flame - found to have infected computers in Iran and other parts of the Middle East, which is thought to have been designed to steal sensitive data.
However, Sophos suggested that the the Simurgh Trojan was likely to have compromised more computers.
"Unlike Flame, which is highly targeted malware that has only been found on a handful of computers globally, this malware is targeting users for whom having their communications compromised could result in imprisonment or worse," wrote Chester Wisniewski, senior security advisor at Sophos, on his company's blog.
"Many thousands depend on the legitimate Simurgh service, which makes it likely that far more people have been impacted by this malware."
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