Recent legislation makes it easier for technology managers to report incidents such as staff downloading child porn.

But the Internet Watch Foundation said some managers feared finding themselves caught up in criminal proceedings.

An IWF survey of 200 firms found 74% of managers would not report guilty staff to the police and 40% would not take steps to discipline or dismiss them.

The IWF, which has called its campaign Wipe it Out, said there was a combination of reasons for this.

"There was a fear they would be held liable, concerns they could lose their jobs and just a general lack of idea of what to do with such material," said a spokesman.

The report did not, however, establish how widespread the problem is.

"Anecdotal evidence suggests there is a problem and there have been court cases of people downloading illegal images at work," said the IWF spokesman.

New law

The IWF is keen to raise awareness of changes to the Sexual Offences Act which, from May last year, provided a conditional defence to protect network managers who need to store potentially illegal images of children as evidence.

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The defence is only valid if the incident is reported within a set amount of time.

The age at which an indecent picture of a child is considered illegal has also been raised from 16 to 18.

"Any employee with glamour shots of 17-year-olds is now behaving illegally," said the IWF spokesman.

He acknowledged that some child pornography finds its way on to work computers via spam.

The campaign is as much about protecting innocent employees as it is about weeding out the guilty, he said.

In 2004, the IWF received 17,255 reports of illegal child images, 20% of which were websites.

Only 1% of online child pornography is hosted in the UK, according to the IWF.