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How can I use a database of some sort to contain a list of valid linux users that can be used to allow them to login to the system as well as FTP in? My situation is that I need allow new user logins to be create from a web based control panel. I was looking for a PAM module but I am not sure if this is the right approach to solving this problem.

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This really depends on the software you are using for the FTP connections.

PAM is definitely one way, since it handles authentication for the system, most ftp applications can be configured to use PAM , which can handle authentication from a database.

Two I've worked with extensively are ProFTPD and vsftpd. There are plenty more out there. What you are looking for is most commonly called virtual users. (basically users that aren't part of the system; some even create virtual users using the system passwd files)

I think the best approach is to find which web based control panel you are going to use and see which ftp servers they support. Some will support two or three, and some only support one.

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LDAP comes to mind. There are quite a few flavors. Perhaps Apache Directory Server?

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Seems like either pam-mysql or pam-ldap would be a good fit.

Either one would allow easy integration/management via a web control panel.

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