Lord Harris of Haringey, former chairman of the Metropolitan Police Authority, said in a keynote speech at the InfoSecurity Europe show in London that NICSS's role needed to be changed from an advisory role to regulatory one that could deal with a national crisis with souped-up powers.
He said the UK is at risk of an "electronic 9/11" because companies are not obliged by law to maintain the highest levels of information security.
"Our national infrastructure is critical, if systems are attack then we are all vulnerable," said Lord Harris. "If technology to disrupt our systems is within reach of teenage nerds, it is within easy reach of organised criminals."
The peer claimed that since 2002, 71 Ministry of Defence computers were compromised by external sources, and over 100 nation countries have some form of cyber-warfare capability.
As reported in SC Magazine, Bruce Schneier, founder and CTO of security firm Counterpane blasted the hype surrounding cyberterrorism, claiming it to be little more than a way of getting more money for IT security projects.