Tony Blair today launched a £1bn drive to get all government services online by 2005.

The prime minister also said that £15m would be allocated to help businesses benefit from the internet and announced the first raft of 600 online centres to give hi-tech access to poorer communities.

Mr Blair, speaking in Loughborough, Leicestershire, said that the UK Online initiatives were designed to get business, people and government hooked up to the internet. "My argument is simple. There is no new economy. There is one economy, all of it being transformed by information technology.

"What is happening is no dot.com fad that will come and go - it is a profound economic revolution. Business and government must now be in a constant process of adapting to change.

"The key to success is knowledge - and the key to government is investment in education and skills."

Mr Blair also disclosed details of the first annual report produced by the government's "e-envoy", Alex Allan.

The prime minister said Britain now had the best off-peak rates for connection to the internet in the world. He said the UK peak access prices had fallen by 30% to 40% since last year and he expected the country to go "shooting up the league table".

Mr Blair said that 90% of workers were now employed in businesses connected to the internet and that a third of the UK population was now online, with the country boasting Europe's largest e-commerce market with £2bn spending last year.

He said a new campaign would be launched to make Britain the best place in the world for e-commerce, with universal access to the internet and all government services on the net.

Mr Blair added: "I am determined that by 2005 at the latest all government services will be online, so we are today announcing that our recent spending review earmarked £1bn for investment in electronic service delivery over the next three years."

He said that from next year unemployed people would be able to search job vacancies from home or in a Job Centre kiosk, place job adverts online or register for VAT online.

"The whole shape of our economy will be changed by this new technology - that's why UK Online is so vital. If we live up to the challenge of the knowledge economy, we can reverse the decades of decline we suffered in the 20th century and become one of the world's most successful economies in the 21st century."