America's National Security Agency has implanted secret surveillance software in nearly 100,000 computers around the world - but not in the US - allowing agents to spy on the machines, it is claimed.
The New York Times cited NSA documents, computer experts and US officials in its report about the use of secret technology using radio waves to gain access to computers that other countries have tried to protect from spying or cyber-attacks.
And the software network could also create a digital highway for launching cyber-attacks, the Times said.
The Times said the technology, used by the agency for several years, relies on radio waves that can be transmitted from tiny circuit boards and USB cards inserted covertly into the computers.
The NSA calls the effort an "active defence" and has used the technology to monitor units of the Chinese Army, the Russian military, drug cartels, trade institutions inside the European Union, and sometimes US partners against terrorism like Saudi Arabia, India and Pakistan, according to the Times.
Among the most frequent targets of the NSA and US Cyber Command has been the Chinese army, the paper says. The United States has accused it of launching regular attacks on American industrial and military targets, often to steal secrets or intellectual property.
When Chinese attackers have placed similar software on computer systems of American companies or government agencies, American officials have protested.
The NSA says the technology has not been used in computers in the US.
"NSA's activities are focused and specifically deployed against - and only against - valid foreign intelligence targets in response to intelligence requirements," Vanee Vines, an agency spokeswoman, said.
"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 have been disclosed in documents leaked by former NSA systems analyst Edward Snowden, theTimes said.
A Dutch newspaper published the map showing where the United States has inserted spy software, sometimes with the help of local authorities. And German news magazine Der Spiegel published information about the NSA's hardware products that can secretly transmit and receive signals from computers, according to the Times.
The paper said it withheld some of those details at the request of US intelligence officials, when it reported in 2012 on American cyber-attacks on Iran.
Meanwhile Barack Obama is expected to endorse changes to the way the government collects millions of Americans' phone records for possible future surveillance, but will leave many of the specific adjustments for Congress to sort out, according to officials familiar with the White House intelligence review.
That move would thrust much of the decision-making on Section 215 of the USA Patriot Act towards a branch of government that is deeply divided over the future of the surveillance apparatus.
President Obama will speak about the bulk collections and other surveillance programmes in a highly-anticipated speech at the US Justice Department on Friday
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."