More than 60 business leaders and academics have written a stark warning to the governments of Britain, Canada and America.

They express "acute concern" and urge steps to "deal with the Millennium bug as a top priority". They fear financial chaos and disruption to health and education if government does not do more.

The letter also warns that "malfunctions in critical areas, such as air traffic control and defence, may put safety at risk."

The heads of Unilever, Cellnet, Lloyds, GEC, British Aerospace, and Marks and Spencer were among the letter's signatories.

Older machines like this could crash come the millennium

Many computers and other electronic devices use only the last two digits to describe a year date and cannot distinguish between the year 2000 and 1900. They may all fail as internal clocks move from December 31 1999 to January 1 2000.

The government has set aside £370 million to tackle the bug in the public sector, but the head of the government-appointed Taskforce 2000, Robin Guenier says, "Government is underestimating the seriousness of this extraordinary problem."

Robin Guenier - "bureaucratic delay should not be tolerated"

He added, "We are surely facing an emergency the same magnitude as a war".

Lives at risk

In the National Health Service alone, Lord Renwick, chair of the Eurim parliamentary IT pressure group, estimates the cost of fixing the problem at £600m - triple the original figure.

In an internal letter, the Department of Health's Medical Devices Agency recently admitted: "The resources do not exist... to investigate every item of hardware and software in use... let alone put right all those that have not been correctly designed for the year 2000."

Between 600 and 1500 people could die as a result of Millennium problems in the NHS according to a report published in December. The prediction is based on the assumption that there will be a 10% failure rate of electronic equipment.
 

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