The UK government has overwhelmingly rejected the recommendations on internet security suggested by the Lords Science and Technology Committee, causing fury among peers.

The peers recommended a police enforcement agency for online crime, making banks officially responsible for losses as an incentive to address online security issues, and setting up a Kitemark to be awarded to secure ISPs.

However, the government dismissed most of the report's findings. "The government recognises the dangers of complacency against this background of continuing success," it said in a statement (PDF).

"Although the number and sophistication of security threats has risen over recent years the government believes that this has to be viewed in the context of the dramatic increase in internet usage.

"As such, we would [deny] the suggestion that the public has lost confidence in the internet and that lawlessness is rife."

The Earl of Erroll, an influential member of the Committee, said: " Throughout our inquiry we tried to look ahead 10 years at what the internet might be like, taking into account the emerging risks and challenges today. That is why our recommendations concentrated on incentives.

"We must ensure that everyone is motivated to improve security. Unfortunately, the government dismissed every recommendation out of hand, and its approach seems to consist solely of putting its head in the sand."