Visual cryptography is a cryptographic technique which allows visual information (e.g. printed text, handwritten notes and pictures) to be encrypted in such a way that the decryption can be performed by the human visual system. A distinct property of visual cryptography is that it does not need any cryptographic knowledge to reconstruct the secret. Error diffusion is a simple but efficient algorithm for image halftone generation. This paper discusses the color visual cryptographic scheme in which the data is divided into half toned shares and each share is embedded with the signature of the participants to ensure the authenticity of digital data.