UK firm 'lost £800m to cyber attack'

Security chief warns of new terror threat and rising cost of cybercrime to British companies

Many youths from the UK Libyan diaspora fought against Gaddafi (Reuters)

Cyber attacks by a foreign state resulted in a British company losing £800m in revenue, the head of MI5 revealed yesterday.

This "was not just through intellectual property loss but also from commercial disadvantage in contractual negotiations", said Jonathan Evans. "They will not be the only corporate victims. The extent of what is going on is astonishing, with industrial-scale processes involving thousands of people lying behind both state-sponsored cyber espionage and organised cyber crime."

Mr Evans said that he rebellions in the Middle East have allowed some members of the global Islamist network created by Osama bin Laden to find bases for exporting jihad. This, he said, was a "new and worrying development and could get worse as events unfold".

The rare public intervention by the director-general of the Security Service adds to the debate about the backing given by the UK, US and European states to opposition movements which have swept away regimes across the region. Critics suggest that it is hard-line Muslim fundamentalists, inimically hostile to the West, rather than progressive groups, which have seized the reins of power in the aftermath.

Giving the Lord Mayor's Lecture at London's Mansion House last night, Mr Evans said: "Today, parts of Arab world have once again become a permissive environment for al Qa'ida. This is the completion of a cycle – al-Qa'ida first moved to Afghanistan due to pressure in their Arab countries of origin. They moved to Pakistan after the fall of the Taliban; and now some are heading back home to the Arab world again.

"A small number of British would-be jihadists are also making their way to Arab countries to seek training and opportunities for militant activity, as they do in Somalia and Yemen. Some will return to the UK and pose a threat here."

Large numbers of young men from the Libyan diaspora from Britain went to fight against Muammar Gaddafi's regime in Libya. Some of them were affiliated to the Libyan Islamic Fighting Group (LIFG) which was, at one point, allied with al-Qa'ida. However, security sources say there is little evidence of returning Libyan fighters becoming involved in domestic terrorist plots.

A former head of the LIFG, Abdelhakim Belhaj, is currently suing the UK government, the former Foreign Secretary Jack Straw and Sir Mark Allen, once an officer with MI6, over alleged complicity in his rendition by US officials.

Mr Evans continued: "The Arab Spring offers the long-term hope of a more pluralistic, democratic and flexible system in the Arab world. If that happens it would ease some of the pressures that have spawned extremism in the region. So we'll have to manage the short-term risks if there is to be a longer-term reward from the Arab Spring."

According to the Royal United Services Institute (RUSI), the UK has faced 43 credible terrorist plots since 9/11, with one deemed to be extremely serious every year since then.

Mr Evans said: "In back rooms and in cars and on the streets there is no shortage of individuals talking about wanting to mount terrorist attacks here. We see them regularly in our intelligence investigations. Others in various parts of the world have the same ambition." But he added that successful operations have meant "we are near to reaching a form of stalemate – they haven't stopped trying but we have got better at stopping them."

At the same time, said Mr Evans, MI5 is facing the challenge of new types of espionage with cyber security in the forefront. The director general said the Security Service was involved in the investigation of "cyber-compromises in over a dozen companies and is working with many others that are potential future targets of hostile state activity. But this is only a tiny proportion of those affected." He added that one London listed company has lost £800m through cyber attacks. The identity of the company cannot be disclosed for reasons of commercial confidentiality, claim Whitehall officials.

The vast majority of state-organised cyber attacks in this country are believed to be carried out by China and Russia, with an array of targets from weapons manufacturers to petroleum producers.