When Tool Outputs Become Commands: Separating Action Induction from Runtime Authorization in Tool-Augmented LLM Agents

Tool-using LLM agents remain vulnerable to indirect prompt injection because trusted instructions and untrusted observations share one context, allowing malicious content to steer consequential input-filtering defenses. Multi-path consensus defenses still leave a high attack success rate because they examine content or aggregated outputs rather than authorizing effects, especially for the within-tool attack, which preserves the intended tool but manipulates its arguments. Data-Flow Control such as CaMeL provides stronger guarantees, but incurs substantial time latency that limits practical deployment. We introduce ToolFence, which compiles a typed authorization blueprint before execution, enforces it through a deterministic monitor, and when the blueprint is incomplete asks a judge to grant new capabilities rather than adjudicate each concrete call. ToolFence provides two key advantages. First, its fine-grained provenance-aware authorization enables the system to distinguish user-authorized values from untrusted observations, effectively addressing the within-tool attack. Second, its deterministic fast path and capability-level runtime grants substantially reduce the frequency of expensive judge calls, improving runtime efficiency. On AgentDojo with Qwen3-max, ToolFence reduces overall ASR to near zero with only a 3.80 percentage-point clean-utility drop and practical runtime overhead.

LLM agents increasingly rely on external tools, expanding capability while creating a new security boundary: third-party tools may appear benign at the interface level while embedding unsafe behavior in implementation. Existing defenses rely on weak metadata, collapse characterization and policy judgment into a single decision, or use heuristic/LLM enforcement that lacks deterministic, auditable reasoning over task context and multi-tool composition. This paper presents ToolGuardian, a policy-driven framework for securing agent-tool interactions through pre-admission vetting and task-aware runtime authorization. ToolGuardian uses progressive characterization to convert evidence into structured facts: descriptions capture declared intent, system-call traces expose coarse behavior, mock execution reveals observed effects, and source analysis identifies latent behavior. ToolGuardian's core contribution is an Answer Set Programming (ASP)-based declarative policy layer that reasons explicitly over capabilities, effects, task context, and composition. We compare ASP against heuristic and LLM-based policy realizations using identical inputs and output contracts. We evaluate ToolGuardian on 16 MCP-style tools, including 8 malicious variants derived from real open-source tools, and 20 runtime scenarios. For vetting, ASP reaches a deny-class F1 of 0.86 and 88% accuracy using description, syscall, and observed-effect evidence. For runtime authorization, fully specified realizations classify all scenarios correctly, while ablations show that removing compositional and conformance rules substantially degrades performance.

LLM agents choose tools and arguments from context that mixes user requests, tool outputs, retrieved records, memory, and untrusted text. Evidence can be relevant without being authorized to determine a decision, so a correct action need not be grounded only in permitted evidence. We introduce a target-specific authorization audit that labels context factors separately for each tool and argument target. Its primary test holds the task, proposition, position, and policy fixed while changing only the proposition's source authority. We then test behavior when valid evidence is weakened and use context-subset interactions as a secondary localization diagnostic. Across 450 controlled next-action tasks and multiple open-weight LLM families, trusted and untrusted variants produce different actions in 5.4 percent of competing cases versus 1.7 percent of supporting cases. Under controlled degradation, unauthorized competition is retained in a full-correct, mixed-error, clean-correct pattern in 2.4 percent of comparisons, with a 95 percent confidence interval from 2.1 to 3.0 percent. These are controlled stress-set rates, not deployment prevalence. The models respond to textual source-authority cues, but this does not prevent untrusted evidence from influencing their actions.