The Serious and Organised Crime Agency (Soca) will focus more on electronic crime as the problem escalates over the next few years.

Soca, a national organisation with an annual budget of £440m, is primarily concerned with drugs and immigration.

But agency director Bill Hughes told the Commons Home Affairs Committee this morning that online crime is becoming more of a concern.

"The area of identity theft is one that we're going to have to be very careful of," he said.

"The e-crime unit within Soca has been working very heavily on tackling identity theft and use of false identities online."

Hughes mentioned an operation in Yorkshire that brought down a web site selling identity theft kits, but said that not all scams were so easy to tackle.

"A lot of these operations take a long time because they are international," he said.

Soca chairman Stephen Lander said intellectual property (IP) theft is also a growing problem that needs tackling.

"As to new crimes, I think IP theft will be an issue as the Chinese economy develops," said Lander. "This is going to be very important in the next twenty years."

IP theft is already a problem for the government. The audio-visual industry loses £800m annually through copyright theft, and the music industry lost £1.1bn between 2003 and 2006, says the Alliance against IP Theft.

And nearly a third (27 per cent) of all software in use in the UK is pirated, according to the Business Software Alliance. In China, the figure is 90 per cent.

Last month, formal consultation started on the changes to copyright legislation put forward in the 2006 Gowers Review. Proposals include extending prison sentences for software copyright infringement from two to 10 years.