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Utilising the battery life and the limited bandwidth available in mobile ad hoc networks (MANETs) in the most efficient manner is an important issue, along with providing security at the network layer. The authors propose, design and describe E2-SCAN, an energy-efficient network layered security solution for MANETs, which protects both routing and packet forwarding functionalities in the context of the on demand distance vector protocol. E2-SCAN is an advanced approach that builds on and improves upon some of the state-of-the-art results available in the literature. The proposed E2-SCAN algorithm protects the routing and data forwarding operations through the same reactive approach, as is provided by the SCAN algorithm. It also enhances the security of the network by detecting and reacting to the malicious nodes. In E2-SCAN, the immediate one-hop neighbour nodes collaboratively monitor. E2-SCAN adopts a modified novel credit strategy to decrease its overhead as the time evolves. Through both analysis and simulation results, the authors demonstrate the effectiveness of E2-SCAN over SCAN in a hostile environment.