The government needs to do more to protect companies operating online, with increasingly sophisticated threats costing the UK millions of pounds, say experts.

Peter Pedersen, chief technology officer of internet gambling company Blue Square, says he has 'lost count' of the number of distributed denial of service (DDOS) attacks the company has received, many of which are accompanied by a ransom demand.

?If the government continues to promote UK plc to get online, then it needs to introduce more legislation against cybercrime and press ISPs to provide more defences for customers,? he said.

Pedersen compares DDOS attacks to thousands of people standing in front of a grocery store, preventing customers from walking in.

'Ecommerce won't happen if these threats continue to grow. Small companies can't take the same measures we can, and ISPs often charge more to mitigate risks for small and medium businesses,? he said.

The National Hi Tech Crime Unit (NHTCU) says threats such as DDOS and identity fraud are rapidly increasing.

'Phishing has escalated tremendously, and has become increasingly sophisticated,' said NHTCU tactical and technical industry liaison Tony Neate.

'Every bank has been targeted already, and now it's starting to move on to other online sites like eBay,' he said.

Industry body the Anti-Phishing Working Group (APWG) says the volume of attacks has grown substantially since the start of the year.

?There?s been a 95 per cent increase on attacks on UK users since the start of the year, with a big increase in attacks on banks,? said APWG?s European spokesman Dave Brunswick.

Brunswick says the level of sophistication is rising, with criminals using pop-up windows on top of authentic banking sites to fool users.