Dealing with spam emails will cost companies $20.5bn (£12.4bn) this year, a figure set to rocket to $198bn by 2007, according to researchers.

Analyst company Radicati Group warned that a company of 10,000 users with no anti-spam protection will spend an average of $49 per mailbox per year processing spam messages in 2003.

With prices for anti-spam solutions starting at $15 to $20 per user, ignoring the problem is hard to justify, it said.

The research firm's study, Anti-Spam Market Trends, 2003-2007, said: "A 10,000-user company, running Microsoft Exchange 2000, is deploying an average of five messaging servers just to process spam in 2003, out of a total of 21 messaging servers.

"By 2007, if nothing is done to stop spam, this will spiral to 25 servers processing spam, out of a total of 50 messaging servers."

The study concluded that 94 per cent of companies consider spam to be a very serious problem, but 43 per cent still do not have a formal anti-spam policy in place.

Although tough legislation may bring mild relief to the market, spammers are not likely to cease their activity, and companies should be ready to combat innovative spamming tricks with more sophisticated technology as well as better user education, the analyst said.

This means a growing demand for anti-spam products. Revenues for anti-spam vendors and outsourcers are expected to approach $653m this year, growing to over $2.4bn by 2007, according to the study.