Shadow Home Secretary David Davis says the problem will only escalate as technology advances and accused the Government of having: "its head stuck in the sand."

New findings have suggested credit card and debit card fraud on the Internet is much greater than previous estimates.

Bank industry figures published earlier this year show "card not present" losses for internet, phone and mail order crime were £290.5m last year.

But a BBC News investigation found that £500m of fraud took place when failed attempts were taken into account.

Mr Davis, MP for Haltemprice and Howden, said yesterday: "Cybercrime is a growing and serious threat to individuals, business and government. It is a problem that will continue to escalate as technology changes."

Yesterday an identity fraud expert said the introduction of chip and pin had forced card thieves to look for new ways to commit fraud. They were increasingly selling details over the Internet, he added.

Danny Harrison, identity fraud manager at York-based life assistance company CPP, said anyone around the world could easily buy stolen card numbers online – they did not need the actual card.

Some thieves were skimming card details, putting the information onto a false card and then sending them abroad to countries that have not introduced chip and pin.

Mr Harrison said: "Chip and pin was almost like putting on the most secure door that you could find for your house, but unfortunately the windows are letting you down.

"It's only tackling one element, which is the petty thief, what has happened is that it has pushed more people to 'card not present' fraud, carried out over the Internet. The risks of being caught are much less," he added.

He said: "The supplying of card numbers is definitely on the increase because it's so easy."

Thieves use a variety of methods to get card details from people – from fitting cameras to filming people putting in their pin numbers to hacking into computer systems and lifting personal details from Internet sites.

Often, Mr Harrison said they discover the fraud has been committed by somebody overseas. But because thieves have been able to buy details on the Internet and bought goods anonymously on the Internet, without having to go into a shop to commit their crime, they are far harder to trace.

Mr Davis has launched a report that looks at cybercrime. He wants a new police unit and specialist prosecutors to deal with Internet fraud.

Minister for e-crime, Vernon Coaker, said: "The Government has been concerned for some time about the rise in losses due to card not present fraud.

"We are working with the card industry to encourage retailers and cardholders to adopt new anti fraud initiatives and precautions.

"In March I met with representatives of the major banks, card schemes and APACS (the UK payments association) to discuss possible responses to card not present fraud. The discussions were extremely positive and they are to report back to me in six months with recommendations.

"Alongside this, the Government has provided £29m over three years to make the City of London Police the national lead on fraud and to set up the National Fraud Reporting Centre and the National Fraud Strategic Authority."

Sandra Quinn, director of communications at APACS, says: "Although card fraud levels have now begun to go up again due to fraud abroad and card not present fraud losses, chip and pin has proven to be an undoubted success in reducing card fraud on the UK high street. And, as more countries follow our lead and upgrade to chip and pin, the opportunities for criminals to use our stolen magnetic stripe details overseas will decrease."

She said the banking industry was continuing to identify ways of protecting against fraud.