We study a new quantum cryptography protocol with continuous variables for
the construction of secret quantum keys. The protocol is based on pairs of
Einstein-Podolsky-Rosen entangled quadratures of a two-mode electromagnetic
field generated by non-degenerate parametric amplification. Instantaneous
measurements of the quantum fluctuations provide the random bits of the sec
ret key. The irreversible alteration of the quadrature entanglement due to
unauthorized measurements immunizes the quantum key distribution against ea
vesdropping attacks. Based on two identical non-degenerate parametric ampli
fiers, the protocol circumvents the usual 50% bits rejection due to base in
compatibility during the key generation process, and avoids the need for ho
modyne detection schemes which are highly sensitive to the mode matching pr
oblems.