We discuss a quantum key distribution scheme in which small phase and ampli
tude modulations of cw light beams carry the key information The presence o
f EPR-type correlations provides the quantum protection. We identify univer
sal constraints on the level of shared information between the intended rec
eiver (Bob) and any eavesdropper (Eve) and use this to make a general evalu
ation of security. We identify teleportation as an optimum eavesdropping te
chnique.