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In August, the Lords claimed the internet was perceived as a "Wild West", and issued 23 recommendations in a bid to clean up the internet.

These ranged from a kite mark scheme for ISPs and security software, to the establishment of a dedicated e-crime unit, to reversing the decision to report financial e-crime to banks instead of police.

However, in its response to the report, the government has rejected virtually all of the Lords' proposals.

"The Government does not agree with the implication within the report that the public has lost confidence in using the internet," it states. "Although the number and sophistication of security threats has risen over recent years the government believes that this has to be viewed in the context of the dramatic increase in internet usage. As such, we would refute the suggestion that the public has lost confidence in the internet and that lawlessness is rife." It provides no statistics to back-up its claims on e-crime.

The government also rejects the Lords' assertion that businesses are failing to protect personal data properly, and that the government isn't taking the problem seriously. "We do not accept that the incidence of loss of personal data by companies is on an upward path and we do not accept that the government is indifferent to the problem," the response states.

Nor

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does it see the case for introducing a compulsory data security breach law, where companies would be obliged to inform consumers if their data was stolen, as is the case in the US. "We will continue to observe the US experience and consider whether we need to find more formal ways of ensuring that companies do - as a matter of routine - contact the Office of the Information Commissioner when problems arise."

On the issue of reporting financial e-crime to banks, rather than the police, the government sees no need to reverse its policy. "The changes from 1 April will significantly reduce police bureaucracy in this area without any loss of effectiveness in dealing with frauds or any degradation of the service provided to victims and provides a better basis for the police to work in partnership with financial institutions to tackle fraud."

Lords' fury

The Lords claim the government is ignorant to the level of e-crime. "The government's response is a huge disappointment," says committee member, Lord Erroll. "We heard compelling evidence of substantial amounts of e-crime and we were entirely persuaded that individuals were unable, on their own, to continue to keep themselves secure."

"We don't know quite how bad things have become today - there are no reliable figures for e-crime. We recommended that the government sets up a group to develop a scheme for recording all forms of e-crime.

"The reply just says that the government 'does not see that there is a need' for this. If you have no idea of the scale of the problem, how can you design solutions?"

"Unfortunately, the government dismissed every recommendation out of hand, and its approach seems to solely consist of putting its head in the sand," he adds.

Richard Clayton, the Cambridge academic who advised the Lords' committee, asks whether the government is "ignorant, stupid, or in the thrall of some special interest group?"

"The Government have settled for complacency, quibbling about the wording of the recommendations, and picking out a handful of the more minor recommendations to 'note' to 'consider' and to 'keep under review'," he says, before dismissing the response as "a whole series of missed opportunities".