Authorities should also make use of a drafted securities law to prosecute those found guilty of spreading "rumours" that have an impact on stock prices, urged a front-page commentary in China Securio

In one case, a popular website called Shanghai Stockstar sparked a jump in share prices for Guangzhou-based Lonkey Industries, after falsely stating the company was in negotiations for a joint venture with an American multinational corporation, it said.

"This requires regulatory departments to adopt high-tech methods and to strengthen Internet supervisory systems, such as establishing `electronic police' to get to the bottom of who is disseminating information and what their motives are," the article said.

"The Securities Law draft currently under revision clearly stipulates that `fabricatingand disseminating rumours, and disrupting normalcy in the markets' are punishable offences," it said.

"Illegal disclosures on the Internet obviously fall under this category."

Shanghai Stockstar is one of several popular websites that have cropped up in China, providing real-time market quotes and Internet stock trading services.

China has been drafting a law to reign in unruly securities markets, as Beijing fears corruption, bogus information and insider trading will shake investor confidence.

"We must correct deviant information to meet the goal of cleaning up the markets."

Government efforts to police the Internet have been mostly limited to filtering out pornography and political messages from pro-democracy activists and Taiwanese or Tibetan independence movements.

But China has attempted to expand Internet security to help combat online theft and attacks by hackers.

Authorities detected more than 100 cases of computer crimes in the past two years, the most serious case involving the theftof 10 million yuan ($1.2 million).

Beijing last year enacted its first criminal law on computer break-ins, setting a maximum five-year jail term for those convicted.

Police in Shanghai caught their first suspected computer hacker under the new law in September, arresting a 22-year-old who allegedly broke in to a computer network and discovered the passwords of more than 500 users.