Governments from all around the globe are engaged in a virtual war where the weapons are hackers and trojans and the prizes for winning a battle include corporate secrets and disruption of the enemies IT infrastructure.
The Virtual Criminology Report, published by security vendor, McAfee this week, engaged experts from NATO, the FBI, the UK's Serious Organised Crime Agency and other research bodies.
The report claims increasingly advanced Web espionage technologies and well funded organisations -- such as governments -- are enjoying not just financial but political gain through clandestine Internet probes.
"Are we in the midst of a cyber cold war and a race for cyber supremacy?" the report asks.
The Chinese government is singled out as the number one culprit behind Web-based espionage activities in the report.
"The Chinese have publicly stated that they are pursuing activities in cyber-espionage and in a government white paper, as read by McAfee Avert Labs, [the Chinese government] speak of technology being a large part of war in the future. The United States, United Kingdom, Germany and several other countries are likely targets for political, military, economic and technical espionage," the report said.
The Chinese government has been implicated in attacks on several countries in the past year, including Germany, the US, India, New Zealand and Australia, the report said. However, the Chinese government denies the claims due to lack of evidence.
However it is not the only government suspected of using the Internet as a means of testing and spying on other countries' critical IT systems. Germany recently aired its plans to create a Trojan designed to help police investigations.
Security analysts are not surprised by the revelations.
"Governments have been using espionage for a fair while now. If we were talking about fair rules of engagement, like moles and counter espionage, it never would have existed and it wouldn't have absorbed lots of money from wealthy governments," said Intelligent Business Research Services security analyst, James Turner.
"While it would be nice to say governments would not use technological means on each other, the reality is that they will and they are.
"The problem with modern terrorism is that it's not linked directly to a nation state. The same can be said of cyber-terrorism. Sometimes there are overlapping interests and groups can be sponsored by a nation but that doesn't mean they're a wholly endorsed or a controlled entity of the state," said Turner.Earlier this year the Kremlin was accused of launching DDoS attacks against Estonian Government Web sites following a conflict over whether Estonia would take down a statue of a Russian leader.
During a five-day period in May, Estonia's official Web sites experienced over 100 DDoS attacks. Russian Web sites were similarly attacked, allegedly in response to those launched against Estonia.
It was the first time in history that any government had accused another of "cyber war", said Alexander Gostev, senior virus analyst at Kaspersky Lab.
The problem that Estonia faced when it called on NATO to respond militarily against Russia to the attacks was that NATO lacks a definition for "cyber war".
"At present, NATO does not view cyber-attacks as military action. That means the NATO countries which have fallen victim to these attacks are automatically not included under the fifth article of the NATO agreement on military protection. None of the NATO Ministers of Defense today would recognise a cyber attack as military action. This issue must be resolved soon," said Estonia's Prime Minister, Andrus Ansip.
The post-analysis of the Estonian conflict may however highlight why governments avoid accusing each other of cyber warfare.
Gadi Evron, an IT security expert from Israel, analysed the Estonian systems for four days after the attack, and reckons that Russia was not behind the attack, but asks: "How do you prove that?"
"The Internet is ideally suited for plausibly refuting anything," he said.