Fears over online security and fraud are preventing a significant proportion of small businesses from capitalising on the internet's potential.

A spokesperson from the Federation of Small Businesses (FSB) said that a lot of small business owners do not feel that they know enough about the internet to embark on ecommerce.

"The basic reason why a lot of members don't fancy selling online at the moment is either because they're not internet experts, so they would need advice from somebody else, or because they're very concerned about online fraud so they don't know what their legal protections are that way as well," he said.

Recent research from the FSB revealed that 19 per cent of smaller companies are concerned about the risk of credit card fraud - although just six per cent have experienced it.

"About a third of our members run their business from home," the spokesperson added. "The number of small business that sell online is 18.4 per cent."

According to the FSB statistics, of this proportion just one per cent of firms generate all of their sales via the internet.