Britain and the United States will create a joint "cyber cell" so spies can tackle the growing threat of terrorists plotting online attacks on the West.
Following cyber attacks on the US by North Korea, British and American agents will share information about threats and respond to attacks that threaten to bring down financial or government organisations.
British Prime Minister David Cameron, who agreed to set up the cell during his visit to the US for talks with President Barack Obama, said it would help the two allies stay "one step ahead" of online terrorists. A report by GCHQ has disclosed that 80pc of large companies in the UK reported a cyber security breach last year, costing between pounds 600,000 and pounds 1.5?million.
Robert Hannigan, GCHQ's director, said that the attacks "show little sign of abating" and that "doing nothing is no longer an option". Britain and the US will conduct war game exercises to test their resilience in the face of cyber attacks.
The first exercise will simulate an attack on the financial sector and will take place later this year. It will involve organisations such as the Bank of England and a number of commercial banks.
British experts from GCHQ and MI5 will work with their American counterparts in the National Security Agency and FBI to use the cell to encourage information about any online threats "to be shared at greater pace and scale", Downing Street said.
It is the first time Britain has established a "cyber cell" with another country. Mr Cameron said: "Just as we have worked with our closest ally, the US, to protect our people and our countries from traditional threats, so we must work together to defend ourselves from new threats like cyber attacks.
(© Daily Telegraph, London)