Skype, the online phone company, was today working to fix an outage that left its 220 million users unable to make cheap calls over the internet.

The company said this afternoon said that its service was stabilising but that it had not yet resolved the problem, which was apparently caused by a fault in its software that means users could not sign on.

"We’re on the road to recovery. Skype is stabilising, but this process may continue throughout the day - we're not out of the woods yet," a statement on Skype's website said.

Skype's chief security officer, Kurt Sauer, told the New York Times that what had happened was caused by "a unique set of events, the genesis of which is not entirely understood".

The flaw existed in every version of the Skype software that had been downloaded since 2003, engineers at the company said, but they were unsure as why the error, which had lain dormant for four years, had only affected the network now.

One theory put forward by voice-over-internet-protocol (VoIP) experts was that the network Skype users to connect its callers had been unable to cope with the problems of scale that have accompanied an increased number of users.

Skype uses peer-to-peer technology to connect calls rather than routing them through a central hub, but it also relies on a number of servers around the world, known as supernodes, which help the network run smoothly.

"There is a danger that services designed to be highly disruptive to traditional telecoms business models have been developed without sufficient regard for resilience," Mark Main, an analyst at Ovum, said.

Steve Blood, a VoIP analyst at Gartner, said Skype's innovation had been to harness the processing power of computers to make calls, but that the 'supernode technology' on which its network relied was prone to problems as more and more users were recruited.

As many as 220 million people have registered with Skype, which allows its members to call each other for free using their computer, and a smaller number also use the service to call traditional phones at cheaper than market rates.

Mr Blood said that the impact on business was likely to be minimal, however, because although many companies now advised their employees to use VoIP to make personal calls while abroad, most had not replaced traditional phone networks with VoIP.

"Businesses recognise the risks of Skype, which has been prone to flaky service - but it's a good way of keeping costs down, and now that many companies are asking employees to pick up the cost of personal calls while they're abroad, it's increasingly used for that purpose," he said.

Skype, which was bought by eBay for $2.6 billion two years ago, was not immediately available for comment today.

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