After many unsuccessful attempt at getting Skype to use a proxy, I give up and post a message on this forum.

I am using Skype for Linux version 1.0.0.20_VM

File->Options doesn't appear to contain anything to set the proxy server.

I have tried setting the http_proxy environment variable with both :

export http_proxy=http://10.107.99.10:1080/
and
export http_proxy=10.107.99.10:1080

but neither format results in Skype trying to connect to the proxy server.

'tcpdump' shows that Skype tries to connect directly to what appears to be hundreds of non-private IP addresses by sending enourmous amounts of UDP and TCP packets.

What am I missing here ?

This is what the Knowledge base suggests:
[quote]Skype for Linux isnt able to connect?

This may happen if you are in a proxied network. Skype for Linux automatically looks for proxy settings from your Opera config files. You may also set the environment variables "http_proxy" or "https_proxy" (note the lowercase) to point to your HTTP(S) proxy ("host:port").[/quote]
You should try the https proxy environment variable as well. Could you tell if you see responses to the packets sent by Skype? (DNS querries may be useful as well)

I have set both the environment variables :
http_proxy=http://10.107.99.10:1080/
https_proxy=http://10.107.99.10:1080/

Running tcpdump on the host '10.107.99.10' doesn't reveal any packets being sent to it from the host running skype '10.105.2.21'

I have done a tcpdump on the host running Skype and the results are here :

http://www.biodef.org/Redir/SkypeProxyProblem.txt.gz

I also can't get the Windows version of Skype to use this Proxy so I guess it might be something in my network setup.

Telnetting from the host runnnig Skype and to port 1080 on the Proxy server works (connection is established) to demonstrate that the packets are not being blocked by any router.

Try setting your environment variables to "10.107.99.10:1080" instead of "http://10.107.99.10:1080/"

If your proxy asks for authentication, try to disable authentication for initial tests!