Oxford University today opened an internet institute, where European researchers are expected to discuss the impact of the internet on society.

The OII (Oxford Internet Institute) has received £5m funding from the Higher Education Funding Council, and double that from Dame Shirley, one of Britain's richest women and founder of the Shirley Foundation.

"I am confident that the institute will enable Britain to play a leading and authoritative role in this important area." said Dame Shirley.

The research centre, which will be attached to Balliol College, Oxford, will study e-commerce, privacy and security on the web and the digital divide in the UK. The University hopes it will become the government's research point for web-related issues.

"This is an area with huge commercial interests and there is a need for a voice that is independent, underpinned by first-class research and recognised worldwide for its integrity," said Vice-Chancellor Colin Lucas.

"To understand what is happening [across the internet] and to formulate helpful policies you need people such as political scientists, lawyers, medics, economists and computing scientists working together," said Andrew Graham, master-elect of Balliol College. "Building on the substantial strengths already in Oxford, this is what OII will do."

The OII comes at a time when the government is facing tough pressure to keep its promise that it would make Britain the European hub for e-commerce.