The present invention performs “flow control” based on the remaining encryption capacity of an encrypted outbound network interface link of a network routing device, such as a router or switch. As the encrypted link begins to run low on encryption key material, this invention begins to discard datagrams queued for transit across that link, in order to signal distant host computers that they should slow down the rate at which they are sending datagrams. The invention, which is particularly useful in cryptographically protected networks that run the TCP/IP protocol stack, allows fine-grained flow control of individual traffic classes because it can determine, for example, how various classes of data traffic (e.g., voice, video, TCP) should be ordered and transmitted through a network. Thus, the invention can be used to implement sophisticated flow control rules so as to give preferential treatment to certain people, departments or computers.