The Stuxnet super virus which disrupted Iran's nuclear programme earlier this year has been traded on the black market and could be used by terrorists, according to Sky News sources.
Senior cyber-security figures have said the worm - the first to have been used to damage targets in the real world - could be used to attack any physical target which relies on computers.
The list of vulnerable installations is almost endless - they include power stations, food distribution networks, hospitals, traffic lights and even dams.
A senior IT security source said: "We have hard evidence that the virus is in the hands of bad guys - we can't say any more than that but these people are highly motivated and highly skilled with a lot of money behind them.
"And they have realised that this kind of virus could be a devastating tool."
Will Gilpin, an IT security consultant to the UK Government added that with it: "You could shut down the police 999 system.
"You could shut down hospital systems and equipment.
"You could shut down power stations, you could shut down the transport network across the United Kingdom."
The Stuxnet attack on the Bushehr nuclear installation in Iran is believed to have been orchestrated by a country.
Now experts warn that the West is extremely vulnerable to similar attacks by criminal gangs seeking blackmail payouts or more likely by terrorist groups.
Stewart Baker, a former assistant secretary with the US Department of Homeland Security, said: "They could shut down power systems, dams, almost any sophisticated industrial process that requires a control software. Which is practically everything."
There has been a rise in cyber attacks in recent years.
On April 8, 15% of all internet traffic was routed through China for 18 minutes in a mysterious incident the Chinese authorities have denied any part in.
The Royal Navy's website was shut down on November 5, allegedly by a Romanian hacker.
In October, the UK Government declared cyber warfare to be a "tier 1" threat to national security.
But experts say a more co-ordinated effort is needed to tackle attacks, along the lines of the Cyber Command agency set up in the US this year.
Source: sky news