REUTERS - British spies are developing an offensive cyber capability to attack terrorists, hackers and rogue states, Finance Minister George Osborne said on Tuesday after warning Islamic State militants wanted to launch deadly cyberattacks of their own.
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Osborne said Islamic State (ISIS) fighters were trying to develop the ability to attack Britain's infrastructure such as hospitals and air traffic control systems with potentially lethal consequences.
In response to this threat and others, Britain was creating its own offensive cyber capability so spies could launch counter attacks, he said.
"We will defend ourselves. But we will also take the fight to you," Osborne said in a speech at Britain's GCHQ eavesdropping agency.
"Strong defenses are necessary for our long-term security. But the capacity to attack is also a form of defense."
He said Friday's attacks in Paris, which killed at least 129 people and were claimed by ISIS, had underscored the need to improve Britain's protection against electronic attack.
ISIS was already using the internet for propaganda, to radicalize people and for planning purposes, said Osborne, Prime Minister David Cameron's close ally.
"They have not been able to use it to kill people yet by attacking our infrastructure through cyberattack," he added. "But we know they want it and are doing their best to build it."
Osborne said public spending on cyber security would be almost doubled to a total of $2.9 billion dollars over the period to 2020, even as he prepares to announce fresh overall spending cuts next week in a bid to return Britain to a budget surplus by the end of the decade.
"It is right that we choose to invest in our cyber defenses even at a time when we must cut other budgets," he said. "The internet represents a critical axis of potential vulnerability."
Cameron said on Monday that the size of Britain's intelligence agency staff would be increased by 15 percent.
Osborne said the decision to ramp up cyber defense funding had been taken before Friday's bloodshed in Paris.
"The stakes could hardly be higher," he said. "If our electricity supply, or our air traffic control, or our hospitals were successfully attacked online, the impact could be measured not just in terms of economic damage but of lives lost."
A new national cyber security plan drawn up by the government would feature a dedicated force to ensure faster and more effective responses to major online attacks. The force would be based at GCHQ in Cheltenham, southwest England.
Other elements of the plan included possible cooperation between internet service providers, with help from the government, to fend off malware attacks and block bad addresses used against British internet users, as well as a new institute to train coders, Osborne said.
British broadband provider TalkTalk suffered a cyberattack in October which affected 157,000 customers. This month, Britain and U.S. authorities carried out a drill with leading banks to test their response to a cyber incident in the financial sector.