Britain is leading Europe when it comes to attracting foreign IT investment, the government claimed today.

Figures released by the Department of Trade and Industry suggest that the UK is second only to the US in attracting investors, and that the number of new computer software and services jobs is up 82 per cent on last year.

Sir Digby Jones, Minister for Trade and Investment, said: "The flexibility of British business is a key strength, but we face tough competition and cannot be complacent.

"This year's growth in financial and business services will boost the UK's knowledge economy, while increased investments in life sciences, software and computer services and ICT will bring added innovation and creativity to our skills base, helping to maintain our competitive edge."

Overall investment rose 17 per cent on last year, following 1,431 new projects started by foreign investors. This accounted for over 36,000 new jobs and over 400,000 being safeguarded.

"Over the next decade our economy is expected to grow by roughly 25 per cent, while China and India will triple the size of their economies and boast over 40 per cent of world growth," said Foreign Secretary David Miliband.

"These are compelling statistics which we ignore at our peril, and underline the significant potential for targeted UK engagement in these markets."