The government has partnered with tech giant Arm in a £36 million project to develop chip technologies that are more resistant to cyber threats.

The next phase of the government’s Digital Security by Design initiative, also backed by Google and Microsoft, will look to shore up the defences within hardware and software systems through innovation.

The government said the project has the potential to prevent hackers from remotely taking control of computer systems as well as targeting cyber-attacks and breaches, meaning more businesses providing online services are better protected.

It also said it will create new business opportunities and help boost productivity.

Around a third of businesses have reported cyber security breaches or attacks in the last 12 months and the cyber threat is constantly evolving.

The average cost of a cyber-attack on a business – where a breach has resulted in loss of data or assets – has increased by more than £1,000 since 2018 to £4,180.

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Arm chief architect and fellow Richard Grisenthwaite said: “Achieving truly robust security for a world of a trillion connected devices requires a radical shift in how technology companies approach cyber-threats.

“Research into new ways of building inherently more cyber-resilient chip platforms is critical.

“Our first step is to create prototype hardware, the Morello Board, as a real-world test platform for prototype architecture developed by Arm that uses the University of Cambridge’s CHERI protection model.

“It will enable industry and academic partners to assess the security benefits of foundational new technologies we’re making significant investments in.”

A further project, backed by £18 million government investment, through the Strategic Priorities Fund, will tackle some of the dangers of the online world from privacy abuses and wrongful use of data like disinformation and online fraud.

The initiative will help provide solutions to some of the issues identified in the government’s Online Harms White Paper, which sets out plans for world-leading legislation to make the UK the safest place in the world to be online.

The project will help understand what businesses and individuals need to reduce the harm they are exposed to by using online platforms and will aim to develop more trustworthy technology.

This will help to prevent incidents of online fraud, phishing emails, impersonating organisations online and viruses or other malware like ransomware, which cost the UK economy millions of pounds in lost productivity.

UK Research and Innovation Chief Executive, Professor Sir Mark Walport, said: “It is crucial that our citizens and businesses are able to access digitally secure products and services that are not vulnerable to cyber threats.

“The investments announced today will help to ensure the UK has a robust system in place to withstand cyber threats and create a safer future online, increasing trust and productivity in our economy.”