Staff cuts at the government agency that tackles cybercrime will leave British businesses vulnerable to attack from criminals and industrial espionage, experts say.

It has emerged that the Serious Organised Crime Agency (Soca), formed last year, will have to shed up to 400 staff when the Home Office announces its policing budget this week.

The Government is also being criticised for last year’s merging of the National Hi-Tech Crime Unit (NHTCU), the police division formed in 2001 to deal with cybercrime, with Soca.

The move, which experts say lessened Britain’s defences, went ahead despite evidence that web-based threats to companies were escalting.

Research released yesterday by Finjan, a web security company, highlighted an increased volume of cyber attacks on British companies from China. In particular, Finjan investigated an attack that used “zero-day exploits” - malicious software for which there are no security patches - that was designed to steal confidential information. It said that it had traced one of the sources of the attacks to a website that belongs to “a Chinese government office”. On Saturday, The Times disclosed that the Director-General of MI5 had written to businessmen with a warning that they were being attacked by Chinese cyberspies.

Soca was hailed as Britain’s answer to the FBI when it was launched last year by Tony Blair. However, it is expected to lose between 200 and 400 of its 4,400 staff.

Ian Brown, of Oxford University, a cyber-espionage expert, said that British businesses were “more vulnerable than they need to be” because of the merger and planned job cuts. “It is apparent now to many people that the merger . . . was a mistake,” he said.

Business figures claim that the merged group is excessively secretive and have criticised it for not producing results. Soca took over the functions of the National Crime Squad, the National Criminal Intelligence Service and NHTCU, as well as much of the work carried out by HM Customs law enforcement division. Its priority areas are drugs and fraud, but it is understood that the Home Office wants the agency to concentrate more on human-trafficking. Critics say that leaves cybercrime and web-based industrial espionage too far down the agenda. The Metropolitan Police wants to establish a new cybercrime unit.

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