The British government has formed a new agency to deal with online threats, after admitting that the UK is facing increasing threats from hostile foreign states, terrorists, and criminal gangs.

A new multi-agency office, the UK Cyber Security Operations Centre, will be established in Cheltenham, attached to GCHQ's headquarters, to provide co-ordinated protection of the UK’s critical IT systems. Computer experts and intelligence agents will actively monitor, analyse and counter hostile computer-based assaults.

The government is to also create a dedicated Office of Cyber Security to co-ordinate policy and oversee a cross-government programme of work. The new office will run within the Cabinet Office, and will liaise with industry as well as providing strategic oversight.

Lord West, the security minister, said terrorist groups, including Al Qaeda, hostile foreign states and organised criminal gangs are intent on using the internet in attacks against the UK and key parts of national infrastructure.

The two centres were announced as the government unveiled the UK's first cyber security strategy, as part of an updated, wider national security strategy, first published last year. The strategy has been revamped in an attempt to combat new threats posed by the digital age, such as cyber fraud, identity theft, e-crime and cyber-warfare.

The government also pledged new funding to improve the government's ability to detect and respond to attacks and make information sharing about threats more resilient.

Prime minister Gordon Brown said: "Just as in the nineteenth century we had to secure the seas for our national safety and prosperity, and in the twentieth century we had to secure the air, in the twenty first century we also have to secure our position in cyber space in order to give people and businesses the confidence they need to operate safely there."

"We need new global rules for the new global age," he said.

"That is why today I am announcing - alongside our updated National Security Strategy - the UK’s first strategy for cyber security."

The strategy will see the UK work closely with other countries to develop international laws for cyber security, and create an ethics advisory group to ensure that policies are "consistent with personal freedoms to use cyber space".

Introducing cyber industrial strategy will also provide opportunities for high tech businesses in the UK, according to government officials. The government will work with private sector to plug a cyber security skills gap in Government and industry.