British online advertising budgets have seen their sharpest rise for over five years, a new report suggests.

According to the Bellwether Report released by the Institute of Practitioners in Advertising (IPA), money spent on online advertising during the last three months of 2006 has been at its highest since the first quarter of 2001.

Author of the report, Chris Williamson, said: "While growth of internet marketing far surpassed that all other categories in Q4, main media advertising is by no means ready to be written off."

The study added that although "traditional media still holds the lions share of marketing spend", the internet now accounts for five per cent of all advertising budgets.

However, 'non-traditional' marketing, which includes the internet, is expected to witness the strongest growth in spend over the next 12 months.

Research conducted by MindShare Interaction last year, claimed the British online marketing sector is growing at a rate of 40 per cent.

IPA is the industry body and professional institute for advertising, media and marketing communications companies throughout the country.