Crime on the internet is driving the biggest growth area in illegal activity in England and Wales, fraud and forgery, which has risen by 29% or 70,000 offences in the past year, according to the latest official crime figures published yesterday.

Apart from the 19% rise in street robberies in inner cities, the increasing volume of credit card fraud on the internet has pushed crime figures up for the first time in six years.

The head of home office research, Paul Wiles, said yesterday that although some of the 29% increase was due to increased reporting and changes in the counting rules, cyber-crime was increasing.

This marked the first official acknowledgement that credit card fraud was a significant emerging problem after months in which the banks, credit companies and eletronic retailers have scorned media "scare stories" and insisted that fraud on the net was a minor problem.

The banking industry's credit card research group has shown that although the internet was only responsible for 2% of all credit and debit card transactions it now generated 50% of all complaints.

Most cover cases where people have ordered the wrong goods by accident or where retailers do not put their publicly recognised names on credit card statements, but they also involve genuine cases of fraud. They ranged from be ing charged for goods or services never received to the worst cases when credit card numbers are sold to other fraudsters.

Anthony Abrahams of the Canadian-based Fraud Watch, said the problem was that credit cards were designed to be used for face to face transactions not for deals over the net or telephone.

Safeguards - such as signatures, magnetic strips and holograms - were of little help in cyberspace. He suggested that their best virtue was probably the £50 limit on an individual's liability if caught up in fraud.

But the British banking industry is hoping that the introduction of "smart" credit cards with microchips over the next two years will go some way to solving this new crime problem.

The Consumer's Association said it believed the use of credit cards on the internet was safe as long as strict guidelines were followed.