OXFORD University will get £1m of investment in the next two years to fund a centre to tackle cybercrime.

Funding for the Government’s Global Centre for Cyber Security Capacity Building has been announced by Foreign Secretary William Hague, who pledged £500,000 a year for at least the next two years.

It will be based at the home of the Oxford Martin School, with the aim of combating activists and terrorists who are posing a growing threat to our national security and economy.

The school’s director, Ian Goldin, Oxford University Professor of Globalisation and Development, said: “The whole purpose is to address critical challenges of the future.

“The international scale of the challenge requires new research and connections with the business world, which is part of the school’s mandate.”

The centre will be based at the Old Indian Institute, a former university library building, on the corner of Broad Street and Catte Street, which is currently being refurbished.

Oxford Martin School was established by Dr James Martin, one of the highest selling authors on books on computing and related technology, in 2005.

The centre will bring together experts from such diverse fields as privacy law, ethics, behavioural changes, banking, crime and computing.

According to the Government more than 120,000 cyber attacks are launched every day against computers in Britain, which are thought to cost the country up to £27bn.

Prof Goldin, whose new book Divided Nations explores the risks brought about by rapid globalisation and technological leaps like the internet, said keeping up with criminals will be far from easy.

He said: “We are in a race, or struggle, between people who want to keep systems safe and secure and those who – for whatever reasons that may be commercial, nationalist or anarchical – want to undermine the system. That won’t end.

“What we will be trying to do is to set out processes and structures that will evolve more rapidly than the efforts of the other side.”

Mr Hague said: “The new centre will be a beacon of expertise and put the UK at the forefront of cyber policy development.”

It will operate from Broad Street from September. The two-year funding will help pay for an additional 12 specialists.

Sadie Creese will head the new centre as professor of cyber security.

She said: “We aim to make our research findings available to governments, communities and organisations in a manner which can define global priorities for cyber security.”