Cyber crime costs the UK economy £27 billion a year, £21bn to businesses, £2.2bn to government and £3.1bn to citizens, according to the government’s first official estimate of the scale of the fraud. Security Minister Baroness Neville-Jones said the government was determined to work with industry to tackle cyber criminals, describing them as 'fearless because they do not think they will be caught'.

'It is a bit like terrorism - the more you know the more frightening it looks,' said Neville-Jones, a former chair of the British Joint Intelligence Committee. She told a briefing in London that the government was not at 'panic stations', adding that it had a strategy to tackle the problem and had committed £650m over the next four years to it.

The cost of cyber crimes includes £9.2bn relating to intellectual property theft cost, £7.6bn from industrial espionage, £2.2bn from extortion, and direct online theft, which cost business £1.3bn. Some £1bn was also lost through theft of customer data.

Martin Sutherland, chief executive of Detica consultancy who co-authored the report said the perpetrators of cyber crime ranged from 'state-sponsored' criminals to organised crime gangs down to 'spotty teenagers sitting in their bedrooms'.