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In the context of multi-agent hypothetical reasoning, agents typically have partial knowledge about their environments, and the union of such knowledge is still incomplete to represent the whole world. Thus, given a global query they collaborate with each other to make correct inferences and hypothesis, whilst maintaining global constraints. Most collaborative reasoning systems operate on the assumption that agents can share or communicate any information they have. However, in application domains like multi-agent systems for healthcare or distributed software agents for security policies in coalition networks, confidentiality of knowledge is an additional primary concern. These agents are required to collaborately compute consistent answers for a query whilst preserving their own private information. This paper addresses this issue showing how this dichotomy between "open communication" in collaborative reasoning and protection of confidentiality can be accommodated. We present a general-purpose distributed abductive logic programming system for multi-agent hypothetical reasoning with confidentiality. Specifically, the system computes consistent conditional answers for a query over a set of distributed normal logic programs with possibly unbound domains and arithmetic constraints, preserving the private information within the logic programs. A case study on security policy analysis in distributed coalition networks is described, as an example of many applications of this system.