According to The Register, "Off the cuff remarks by Austrian government officials suggest that Skype conversations might be intercepted" via a backdoor or through the encryption keys. The comments were made at a recent meeting on lawful interception between ISPs and Austrian regulators. The off the cuff comment was from an unnamed "high-ranking" official at Austria's interior ministry who said that listening into a conversation over Skype "presented no particular problems"

Contrast that with German police who recently expressed frustration about their inability to decipher the encryption used by Skype in order to tap into the VoIP calls of suspected terrorists.

According to the article, security experts Philippe Biondi and Fabrice Desclaux voiced concerns that Skype has the keys to decrypt calls or sessions, a claim which Skype denies.

I can definitely answer whether or not Skype phone conversations can be eavesdropped by law enforcement officials. The answer is definitely "yes".

Remember the world-wide Skype outage that I broke the news about last August? Well, a reliable source told me off the record that the outage was part of a top-secret plan in collaboration with the NSA to install a encryption key database to allow law enforcement personnel to decipher Skype conversations. As it was explained to me, any time a Skype conversation is initiated, an encryption key is not only exchanged with the called party, but it's also sent to various Skype servers to store in the database. Along with the key, timestamps and IP addresses are also recorded. Although the RTP audio isn't sent to the Skype servers, my source told me that after a FISA warrant (or other warrant) is issued, it isn't difficult to monitor Skype conversations at the ISP level using specially-developed equipment that simply pulls the encryption keys from the Skype database.

Apparently, the worldwide Skype outage was NOT due to Windows Update, but rather was part of the "cut over" to the new system. Apparently, they couldn't perform the cut over without tearing down the entire Skype p2p network first.