Internet major Google will begin handing over improperly collected data, which it intercepted from private WiFi connections, to European regulators within the next two days, a media report said.

The Financial Times said in a report that Google has decided to hand over the data "in an effort to defuse growing controversy over its latest privacy blunder".

The report quoted Google CEO Eric Schmidt as saying that "the company will hand over information initially to the German, French and Spanish data protection authorities".

Germany is considering a criminal investigation into this practice of collecting data.

Google faced a stand-off with Hamburg privacy authorities last week over the legality of handing over the data, the report said, adding that it now appears willing to reach a compromise.

The company would also publish the results of an external audit into the practice, which involved cars photographing streets for Google's Street View service ending up collecting snippets of personal information from unsecured WiFi networks.

Schmidt admitted that he could not rule out the possibility that personal information, such as bank account details, was among the data collected.

"We screwed up. Let's be very clear about that.If you are honest about your mistakes, it is the best defence for it not happening again," Schmidt was quoted as saying in the report.

There is also an internal investigation being conducted against the software engineer responsible for the rogue code, which was in "clear violation" of Google's rules.

He also said the company would conduct an internal review of all its privacy practices, checking all the codes related to collecting data, and would reveal the results within the next month.

Google had also faced privacy concerns over the launch of its Buzz social networking service earlier this year, besides a recent hacker attack on its computer systems.