"It is in the wild; it's growing," said Keith Peer, president of Central Command Inc, an Ohio-based anti-virus consultant. "We are getting infection reports as we speak...(about) one to five calls (from clients) per hour."

But while dozens of instances of the infected e-mail have been reported, serious damage - system shutdowns or network outages, for example - are rare so far.

"We haven't really heard of too much damage, because people have been proactively sending us the sample rather than allowing it to spread," said Narender Mangalam, Computer Associates International Inc's director of security strategy.Computer Associates has received calls from at least two Fortune 500 companies, and more than 20 smaller firms. But Mangalam noted that companies are increasingly more sensitive to these security breaches, thanks in part to "Melissa" and "Chernobyl," 1999's first two big computer virus outbreaks.

This latest strain of the Explorer Zip worm, is being carried with a different kind of compression software.

The so-called Trojan horse arrives as an e-mail that has the target user's own name on it, and it appears to be from a friend. The message reads, "I received your email and I shall send you a reply ASAP. Till then, take a look at the attached zipped docs." The attached file destroys files on the user's disk drive when it is opened.

The worm places other infected files on a user's system, and can reconfigure it such that the virus launches every time the computer is turned on.