About 15 million people have joined Second Life
The government has hit back at claims it is wasting taxpayers' money on a virtual reality website.
The 3D "innovations centre" on the Second Life site cost £20,000 to set up and £12,000 a year to run even though it is not accessible to the public.
Conservative MP Nick Hurd said it showed the government was "living in a fantasy world".
The Department for Work and Pensions claimed the virtual meeting place could save taxpayers money in the long run.
A DWP spokesman said: "We are currently exploring the potential of using Second Life and have active interest from a number of government departments.
"Our new innovation centre in Second Life is a virtual area where both government and private companies can showcase technological innovations, such as low carbon footprint technology.
"We believe it could help make sharing technology more efficient and save taxpayers' money as meetings, events and shows can be held online at a fraction of the cost and resources."
The DWP, which is running the site with other government departments, says the site could eventually cover its own running costs as companies will be charged a fee to "showcase" products.
But at the moment it was just a pilot and was only accessible to the firms taking part and government officials and there are no plans to make the site available to the wider public. The project will be reviewed in 2011.
Nick Hurd said the government should not be "wasting" taxpayers' money on "extravagant" projects such as this during a recession.
"I am as excited by technology as anyone, I just don't necessarily think, in these times, that taxpayers money, in terms of government expenditure, should be spent on things like this. It looks like an indulgence."
He added: "It is just one small example of government extravagance."
Second Life is the best-known virtual world on the internet. People are shown as digital versions of themselves, known as avatars, who can build homes and businesses, buy and sell land and have relationships.
About 15 million people have joined Second Life, although the number of active users is thought to be in the hundreds of thousands.