The Trade and Industry Secretary Peter Mandelson, launching a Competitiveness White Paper, said he was announcing a programme that was bold, far-reaching and absolutely necessary.

Peter Mandelson's assessment of the growth of electronic commerce

"In the last century, Britain built its success through global leadership in the trade of physical goods," he said.

"To succeed in the next century, Britain must become a leading trading nation on the Internet - which is now the single fastest growing marketplace in the global economy."

Funding increased to get small businesses online

Mr Mandelson said there would be an extra �20m funding for the Information Society Initiative, to help more small businesses take advantage of new technologies.

He also announced in the House of Commons the publication of a separate report, Benchmarking the Digital Economy. He described it as "an honest and hard-headed assessment of where we stand and what we need to do to become the best."

Internet-related measures in the White Paper include:

• an Electronic Commerce Bill to remove legal barriers to online trading

• a plan for digital hallmarks on Websites as part of an industry-led initiative to build confidence in buying and trading online.

• international action to keep the Internet free from red tape

The government is setting a target to triple the number of small businesses wired up to the digital marketplace to one million by 2002. The �20m will go towards a nationwide network of support centres, an e-commerce resource centre on the Internet and a national award to recognise excellence in digital business.