Under a new directive from the ministry of public security, businesses which provide on-line service must register with local information industry officials.

The Internet cafes must also provide details about their business operations, including the names of all web surfers using the company's computers.

Those cafes or bars found in violation of national laws governing information management will have their licences revoked and business shut, the news service said.

"Some business operators are using the bars as a front to engage in gambling or pornography," the report said. "Authorities believe this is posing a threat to the hearts and minds of the youth."

The regulations are the most recent in China's struggle to manage the spread of the global information resource.

More than two million Chinese are on-line,state media said this week and some experts predict the number of web surfers to top 10 million by next year.

While recognising the important benefits the web brings to China's development, Beijing is also worried the Internet poses a threat to social and national stability.

In a landmark case in Shanghai, Lin Hai, a 30-year-old computer engineer, was accused of subversion for selling E-mail addresses to an overseas pro-democracy organisation.

His trial was held behind closed doors in December, but no verdict has been announced.

Police have also stepped up their war on hackers, most recently detaining one software designer for installing a "logic bomb" inside two popular educational programs, Xinhua said on Tuesday.

The reports said the man created the virus after an argument with his boss. It has already caused more than 500,000 yuan ($60,300) in damage to computers by erasing their hard drives, Xinhua said.