China Tuesday dismissed allegations that it was engaged in computer espionage worldwide as "lies" fabricated by people aiming to tarnish the rise of the Asian giant.

"Some people outside of China are bent on fabricating lies of so-called Chinese computer spies," foreign ministry spokesman Qin Gang told journalists.

"Their attempt to tarnish China with lies is doomed to failure."

Qin was responding to a report by Canadian researchers that said a shadowy cyber-espionage network based mostly in China had infiltrated government and private computers around the world.

The network, known as GhostNet, infected 1,295 computers in 103 countries and penetrated systems containing sensitive information in top political, economic and media offices, the researchers said in a report.

The report by Information Warfare Monitor was commissioned by the office of the Dalai Lama, the exiled Tibetan spiritual leader, which was alarmed by possible breaches of security in the computer systems of his exiled government.

The 10-month investigation by specialists based at the University of Toronto found the spying was being done from computers based almost exclusively in China.

But researchers said that while the findings were disturbing there was no conclusive evidence the Chinese government was involved, highlighting that China now had the world's highest number of Internet users.

Qin insisted that the Chinese government has always been opposed to criminal activity on the Internet, including hacking into the computers of others.

He said a "Cold War" attitude towards Beijing persisted overseas, where China's rise as a global power was viewed as an international threat.

"Outside China there is a ghost called a Cold War ghost and a virus called the China threat," Qin said.

"People haunted by the Cold War ghost occasionally suffer a seizure caused by the China threat virus."

According to the Canadian report, many of the compromised computers were in the overseas embassies of Asian countries, such as India, Indonesia, Malaysia, Pakistan, Thailand, Taiwan and several other countries.

"Up to 30 percent of the infected hosts are considered high-value targets and include computers located at ministries of foreign affairs, embassies, international organizations, news media and NGOs," the report said.

It was not the first time that China has been fingered as the source of cyber attacks.

A US congressional panel warned in November that China has developed a sophisticated cyber warfare programme and stepped up its capacity to penetrate US computer networks to extract sensitive information.

"China has an active cyber espionage programme," the US-China Economic and Security Review Commission said in its annual report to the US Congress.

"China is targeting US government and commercial computers."