Government and businesses across Bermuda were ravaged by a computer bug which was spreading across the world yesterday.

The "Love Bug'' e-mail, which has multiplied throughout millions of computers globally, caused havoc as companies and Government closed down their e-mail systems.

The Bermuda International Business Association (BIBA), which was hit by the bug early yesterday, fielded a stream of calls from companies worried about how to deal with the problem.

Worldwide, the bug closed down the e-mail system in the House of Commons in London, infiltrated the US Congress and crippled e-mail services in hundreds of thousands of companies from Hong Kong, through Europe, to America.

It is thought the bug arrived on the Island through some of the major financial companies which have offices in Hong Kong and London.

The e-mail message is entitled "I Love You''. When an attachment on the message is opened, it multiplies, sending itself to every person on the user's address list, thereby paralysing the e-mail system.

It also causes damage to the hard drive and could result in files being erased.

It is similar, but more destructive than, the Melissa bug unleashed last year which infected about a million computers in the US, causing $80 million in damage.

Bill Pollack, a spokesman for the CERT Coordination Center in Pittsburgh, a government-chartered computer security team, said: "It appears to be the same sort of class of virus as Melissa.'' By mid-afternoon Eastern time, a virus scanning system provided on the Internet by the Trend Micro computer security company had already detected almost 1.2 million infected computer files around the world, including more than 900,000 in the US.

In Britain, about 30 percent of company e-mail systems were brought down by the virus, according to Network Associates, another computer security company.

In Sweden, the tally was 80 percent.

Much like Melissa, the "love bug'' spreads by infiltrating a computer user's address book and sending copies of itself to that person's contacts. However, the new virus also seemed to be using instant messaging or "Internet chat'' systems such as ICQ to spread, Computer Associates reported.

The virus appeared in Hong Kong late in the afternoon, spreading throughout e-mail systems once a user opened one of the contaminated messages. It later moved into European parliamentary houses and through the high-tech systems of big companies and financial traders.

The new virus, which uses the Outlook e-mail programme from Microsoft to spread, also may infect other types of files stored on desktop computers and network servers, CERT reported on its telephone hotline.

The Federal Bureau of Investigation in Washington has launched a criminal investigation to find out who set off the devastating bug.

Several anti-virus companies had found a solution to the menace yesterday and many businesses were applying the programmes last night before deciding it was safe to reopen their e-mail systems.

Government e-mail was switched off just before 9 a.m. yesterday after staff who came in early discovered their in-trays bombarded with the `I Love You' message.

Major companies on the Island such as the Bank of Bermuda and Shell, and institutions such as BIBA, were among those hit by the bug.

Nina Jacobs, BIBA's local programme co-ordinator, said: "Its been pretty widespread and we've fielded quite a lot of calls throughout the day.

"We received the bug from a client first thing this morning and many people have received it twice. Its definitely slowed business today due to problems with servers.'' `Love Bug' hits Island Michael Oatley, Government's director of computer systems and services, said an anti-virus programme was being run on e-mail users last night.

E-mail will be restored to Government Departments today if the programme is successful.

Mr. Oatley said: "A fix has been identified by some of the companies and we are installing it overnight and we'll take a decision in the morning about restoring e-mail.

"It depends on the success of the fix. As a consequence of recognising the problem early, we were able to control it and we should be good for a fix tomorrow.'' He added: "E-mail is an optional tool. It is not a mission-critical application, but this is a nuisance.'' The Bank of Bermuda held all e-mails to staff when it discovered the bug.

Vice president systems manager Wendy McLeod, said: "These e-mails to our employees will be delivered to our employees as soon as virus blockers for "I Love You'' have been installed.

"Because of the way our workstations have been configured, there has been no damage to our workstations of systems.'' Craig Ferguson of e-mail servers Logic said: "We were a little busier than normal. Most of our corporate customers have our file-servers and they seem to be OK.

"The biggest worry now is people going home and checking their e-mails, but hopefully most people will have heard about this now.'' `LOVE'S' DEADLY BYTE No caption Government forced to switch off e-mail Bank of Bermuda, Shell report problems BIBA swamped by calls from anxious companies