Industry experts are calling for a revamp of the Computer Misuse Act after the government revealed that only seven hackers have been imprisoned in the past two years.
At the same time an influential lobby group has warned that improvements in tackling e-crime are needed before its growth overwhelms the UK's ability to fight back.
In August last year the Confederation of British Industry said that two thirds of its members had suffered serious cyber crime attacks.
According to figures from the Home Office, there were only 33 prosecutions for offences under the Computer Misuse Act in 1999 and 2000, the latest years for which figures are available.
Offenders received sentences in only 26 cases, of which five received community service and one a suspended sentence. Seven were given custodial sentences, and seven were fined.
David Roberts, chief executive of blue chip user group The Infrastructure Forum, said: "It looks like the very small tip of a very large iceberg. Something should be done to encourage organisations to keep better records or register incidents when they are being assessed [by hackers]."
He added that the police faced problems because of the global nature of cyber crime. "The perpetrator could be thousands of miles away and just identifying what part of the world the attack was launched from is quite difficult," he explained.
"But I am surprised by the small number of prosecutions. If the process for prosecuting is difficult to follow then companies will be deterred from bothering," said Roberts.
A draft briefing on e-crime, published by parliamentary lobby group Eurim this week, warned starkly: "It is imperative that action be taken now, before the growth in e-crime overwhelms our capability to combat it and becomes a drag on the growth of ebusiness."
Pointing out that cyber crime is a low priority for UK law enforcement agencies, the Eurim briefing continued: "If a supermarket is burned down the police investigate and the judge will be severe.
"If an ebusiness is similarly destroyed, no police station wants to receive the report because they lack the skills or resources to react.
"The Computer Misuse Act was developed before the advent of the internet, and needs updating to cover types of crime against computer systems that were not around then."
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