Russian hackers have targeted the Ministry of Defence, Home Office and police through attacks on a computer company serving the public sector bodies.
It is thought the operation began in March but confirmation the UK was targeted only came yesterday.
A Whitehall source told The Times: 'There has been a hugely sophisticated cyber espionage operation likely to have been committed by a very sophisticated state actor.'
It comes after Boris Johnson announced a £1.5billion cyberforce to take down enemy computer systems and hack into enemy air defences to protect our warplanes.
It is thought the operation began in March but confirmation the UK was targeted only came yesterday (file image of GCHQ)
The Russian hackers corrupted management software from SolarWinds, a computer network based in Texas, in an effort to unlock networks.
Some 51 deals were signed by UK public bodies with SolarWinds products, licences and supports.
The NHS, Intellectual Property Office, Medicines and Healthcare products Regulatory Agency and the Department for Education were among those using the firm's products.
The firm's website also reveals it is used by Nato, the European Parliament and the Government Communications Headquarters, the UK electronic surveillance agency.
The hackers did not successfully breach any UK Government department but an 'extremely small number' of organisations were victims, the newspaper reported.
The source revealed the scale of the attack was 'really serious' and the hackers allegedly gained access to computers at offices overseeing US nuclear energy and weapons.
Hackers infiltrated 40 government agencies, according to Microsoft, which helped respond to the attack.
Director Jeremy Fleming at an event to mark 100 years of the Government Communications Headquarters. A US official claimed Russia-based hackers were responsible for the 'worst hacking case in the history of America'
Brad Smith, the Microsoft president, said in a blog post: 'It's certain that the number and location of victims will keep growing. This is not "espionage as usual" even in the digital age. Instead, it represents an act of recklessness that created a serious technological vulnerability for the US and the world.'
A US official claimed Russia-based hackers were responsible for the 'worst hacking case in the history of America'.
It comes after defence secretary Ben Wallace said its budget of £1.5billion over the next four years ‘will give us the capability to launch offensive cyber operations against our adversaries’ in ways not seen before.
Mr Wallace said the force would also combat organised criminals linked to the Russian state. ‘We need sometimes our ability to deal with that problem,’ he added.
GCHQ director Jeremy Fleming said the force ‘brings together intelligence and defence capabilities to transform the UK’s ability to contest adversaries in cyber space, to protect the country, its people and our way of life’.