By Joseph Menn SAN FRANCISCO (Reuters) – Electronic spying tools used by the U.S. government could end up in the hands of organized criminals and hackers, further eroding Internet security, warned industry leaders who called for new restrictions and oversight of government activity. It is a big worry that the methods will spread, said Andrew France, former deputy director of the UKs NSA equivalent, GCHQ, and now chief executive of security startup Darktrace. The government habit of purchasing information about undisclosed holes in software is also really troublesome, said former White House cyber security advisor Howard Schmidt. Theres collateral damage. Both France and Schmidt spoke to Reuters at the annual RSA Conference, the worlds largest cyber security gathering, in San Francisco last week.