The UK is developing the ability to use cyber attacks against terror groups, criminal gangs, rogue states or hackers, George Osborne has said.

The Chancellor signalled a change in policy away from just defence against online attacks.

Whoever hits the UK should know "we are able to hit back"‎, Mr Osborne said in a speech at GCHQ.

 “Strong defences are necessary ... but the capacity to attack is also a form of defence,” he added. 

He predicted that the move would act as a strong deterrent against a cyber attack on the UK.