The European Commission and the USA have agreed to continue their talks to try to secure agreement on the sharing of airline passenger data.
European Commission spokesman Jonathan Todd said earlier the talks had broken down, just hours before the existing agreement was due to expire.
But US Homeland Security Secretary Michael Chertoff said there was 'absolutely no basis' to say the talks had collapsed.
He told the Reuters new agency in an interview that Todd's comments were incorrect.
He said they were confident they could move forward to a mutually acceptable agreement adding that the US would send a draft agreement to the European Commission later tonight.