The majority of firms with less than ten employees have no internet access, a new report suggests.

Data gathered by UK Online found that two-thirds of these small firms had no internet connection, email or website, meaning that they are missing out on potentially lucrative markets.

Furthermore, the research found that the owners of a third of thesmall businesses with some connection used a consumer package to access the internet.

While these people might have found this a cheaper option, UK Online warned that businesses may find the business support lacking if a problem occurs.

"Small businesses have been relatively slow to reap the rewards that an effective online presence can bring," explained Shane Redding, chairman of the Institute of Direct Marketing.

"There is a clear need for small business owners to better understand the opportunities available so that they can continue to thrive and compete against larger businesses."

A recent report from Mediasurface found that 61 per cent of small businesses were unhappy with any website they did have.