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The report, SmartGov - renewing Electronic Government for Improved Service Delivery, says the government's current target of getting all services online by 2005 should be downgraded, with priority given to getting people to use them.

Co-auther James Crabtree said: 'Some of the services Government has to put online to meet its 100 per cent target - from burial at sea to potato seed classification - begin to look a little peculiar when barely 3 per cent of those eligible are filling in their tax returns online.'

'Targets lead to perverse outcomes,' said Nick Isles, Deputy Director of Advocacy, 'The priority is getting knowledge of these services to the people that can use them... and to achieve [the Government's] objectives an element of compulsion is essential. This is absolutely critical.'

Isle pointed to precedents set in the US where citizens filing their tax returns online have longer to do so than those doing so by paper.

The report recommends that rather than going for a 'big bang' centralised approach of throwing everything online in one fell swoop, the Government strive to 'deliver a smarter centre which can promote stronger decentralisation.'

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In short, by setting national standards but giving local councils the flexibility to deliver online services that make a difference to the people using them, the Government should be able to achieve some real success stories. Focusing on these will give the public more confidence in the project and promote greater use in turn.

Even so, the problem of low use - currently at around 10 per cent - and negative public perceptions of these services may yet turn out to be growing pains, said Isles. 'Transition requires a very good understanding of the impact of technologies for delivery.' He pointed to the passport fiasco which he claimed would not have made front page news had the technical hiccup blighted a business rather than the Government. 'This is rites of passage stuff,' he said, and remained confident that performance would improve with time.

The report also recommends the Government undertake a rebranding exercise - rather than hive off e-services for those with the nous to use them, it should amalgamate them into a general strategy for the reform of public services. Often disadvantaged groups stand to benefit most from these services and yet are least likely to be able to access them.

The telephone still remains the most popular method of dealing with the state over more complicated matters and so these more traditional forms of access should be accommodated with the new services.

Report co-author Noah Curthoys said: 'The E-Envoy has hinted he is about to unveil a "dramatic shakeup" of e-Government. We are calling on Government to redouble their efforts to put increasing usage at the heart of this review, and to back this up with increased resources to meet their targets and new strategies to get people using e-Government.'