British banks have been advised not to do business with legally or ethically dubious websites.

The Association for Payment Clearing Services (Apacs), the banking trade body, has updated its guidelines for members dealing with online traders.

The guidelines advise banks that can accept card payments on behalf of websites not to conduct business with sites that deal in racist, sexually violent, paedophilic or terrorist material.

An Apacs representative said the guidelines had been around for seven years but previously dealt with child pornography, and that a series of high-profile court cases involving illegal websites was among the reasons for the amendments.

"Online traders are not always very forthcoming about their real business, which is why banks sometimes find they are doing business with illegal sites. What's happening more and more now is that the police and Government are liasing with the banks to stop payments being made to these sites," he said.

"The banks will undertake a number of checks prior to accepting business from a site, and they continuously monitor the content. If they uncover anything illegal at any stage they will certainly not accept any payments for the site."