The man on the banquette at Indochine had a mild expression, spectacles, long, lank hair and a dark flannel shirt, with its sleeves rolled to show off an armful of the sort of tattoos that might once have denoted a relationship with some feral motorbike club, but which have become downtown Manhattan's equivalent of a club tie. In short, Jed, which was the only name he would give me, was the total club kid.

Alongside Jed on the banquette were a slender blonde woman, whose nom de guerre is Justine Ski, and a hefty man called Frank Monte with a sallow face and a black Versace suit. It was rather a covert operation to spy on New York's nightlife. Within Jed's pocket was a device the size of a large postage stamp a colour video-surveillance camera. Its fibre-opticlens, itself the size of a single grain of caviar, was peering through his buttonhole, recording the goings-on on a tape that would be transmitted to Internet viewers. They could watch what was happening in Indochine on a web site called Spy7; the site is owned by Frank Monte.

From Indochine, the group -- Jed, Justine, Monte and myself -- made its way to Veruka, a club on nearby Broome Street. Here, a birthday party for actor Mark Wahlberg was under way. The guests included such Manhattan gossip-column regulars as director Penny Marshall, actors Stephen Baldwin, Gretchin Moll and Neve Campbell and teenage model Bridget Hall. Jed once again wove his wired way through the throng.

Frank Monte is a wholly appropriate progenitor for Spy7, the most successful of a growing number of Internet paparazzi sites on the Web. An Australian-born private investigator, his resume includes stints as a bodyguard and a corporate spy. He was once hired by the late Aristotle Onassis to bug the telephones of his businessassociates. He has also worked, he says, in a secret capacity for Jack Nicholson. He had pre-mortem talks about protection with Gianni Versace.

One of Monte's services, Photo Shoot, shows what he calls ``generic'' photographs, Playboy-type girlie pictures, bought in bulk from California photographers. Another service, more enterprisingly, has taken its cue from Jennicam, the notorious web site set up a couple of years ago by a then 20-year-old Jennifer Ringley in her bedroom. Frank Monte's own stab at the genre being called A NY Dorm. ``The dorm site started with two students who wanted to make some money,'' he says. ``They just walk around in their underwear.''

A third offering on Spy7 brings a dose of real outside-world celebrity to voyeurism. It is a tape of the rock star Perry Farrell, who made his reputation with the group Jane's Addiction before moving on to found the alternative rock tour Lollapalooza. The tape shows the musician making out with a female companion. ``The tape of Pamela Anderson andTommy Lee has made $40million,'' Monte observes. So it was with the rosiest of expectations that he plunked the Farrell tape on to Spy7. Though lucrative, all of this -- the Farrell tape, A NY Dorm -- is what Monte calls ``old wave''. It is Spy7's fourth service which is offering something fresh, and, in the spirit of the times, radically intrusive, more intrusive, in fact, than even Monte himself at first imagined.

NiteLifeCam is for paid subscribers only, and it was created, like most genuine innovations, almost by accident. One night, Jed and Monte visited the red-hot Manhattan club, Moomba. Jed spotted Leonardo DiCaprio and Ralph Fiennes there and noted as much to Monte. It just so happened that Monte had that week been trying to think up ways to use surveillance technologies on the Internet. Monte bought the necessary equipment. He hired Jed and three other club kids, a woman and two guys. Covert videotaping is legal in New York.

Much of the footage on NiteLifeCam and Spy Girl consists, predictably,of hypnotic nothing-muchness, people-watching in fancy spots, with the odd famous face occasionally swimming into range. Therein seems to lie its appeal. Monte remembers sitting down with Justine Ski at another Madison brasserie, Nosidam. ``We saw Elle McPherson, Alec Baldwin, Winona Ryder, Elizabeth Hurley and her boyfriend,'' Monte says almost wistfully. ``All in the space of an hour.''

Life is not always this sweet for the Net paparazzi however. One night, a camera was poorly placed, and viewers were treated to a full-on picture of a wine glass for hours on end. Monte is confident such problems will be overcome. In the meantime, the money is starting to flow. NiteLifeCam currently runs live for two to three hours a night and already has 4,500 subscribers, who pay $19.95 a year. And the number is growing.