Britain is set to increase its cyber protection budgets up to £2bn.
Philip Hammond is insisting Britain will retaliate against hackers amid warnings that everything from nuclear power plants to toasters are under threat.
The Chancellor will deliver a stark warning to lone hackers and hostile foreign states like Russia and China as he unveils the government's £2billion cyber strategy.
The drive will help protect key infrastructure feared to be vulnerable, as well as aiming to educate the public how to make their own online activities more secure.
In a sign of the scale of the threat, it has emerged that one scam saw up to 50,000 Britons a day sent a fake tax refund.
The bogus communication - which asked for personal details in order to reclaim money – peaked in September and took six weeks to close down.
Officials believe reliance on modern technology has made the UK ‘increasingly vulnerable’, with vital infrastructure such as hospitals, power stations, airports and banks all being targeted.
Smart gadgets in the home which can be operated over the internet, such as toasters, televisions and central heating systems, are also considered to be a risk.
Speaking ahead of today’s announcement, Cabinet Office minister Ben Gummer said: ‘Cyber attacks are no longer the stuff of spy thrillers and action movies – they are a reality and they are happening now.’
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