Cryptographic protocols based on public key methods are based on certificates and public key infrastructure (PKI) to support certificate management. The emerging field of Identity Based Encryption protocols allows to simplify the infrastructure requirements via a Private-key Generator (PKG) while providing the same flexibility. However one significant limitation of Identity Based Encryption methods is that the PKG can end up being a de-facto key escrow server with undesirable consequences. Another observed deficiency is a lack of mutual authentication of communicating parties. Here, Identity Based Authenticated Key Exchange (IBAKE) Protocol is specified which does not suffer from the key escrow problem and in addition provides mutual authentication and a perfect forward and backwards secrecy.