Asked to assess the danger posed to digital networks, Gates said: "There is a huge future threat and there is a considerable current threat.

"And that's just the reality that we all face."

He said the Pentagon had bolstered security for the military's networks and hoped to do the same for defense industry contractors.

"We are working with our partners in the defense industrial base to bring them under that umbrella, to provide them with protection," he said at a Wall Street Journal conference of chief executives.

Gates said the challenge for cyber security efforts inside the United States is that resources and expertise are concentrated in the military and the National Security Agency (NSA), which raises thorny legal questions about civil liberties.

"The only defense the United States has I think against nation states and other potential threats in the cyber world is the National Security Agency," said Gates, referring to the secretive surveillance agency.

"You cannot replicate the NSA for domestic affairs, there isn't enough money, there isn't enough time and there isn't enough human talent.

"So how do you let the domestic side of the government have access to the asset that the NSA represents, while at the same time taking into account the concerns for privacy and civil liberties?"

Gates, a former CIA director, touted an agreement approved by President Barack Obama last month between the Pentagon and the Department of Homeland Security that he said paved the way for unprecedented cooperation between the NSA and the domestic agencies on cyber security.

The new approach allows for legal and other officials from the Department of Homeland Security to work out of the NSA's offices, and to assign tasks to the NSA to safeguard domestic networks, he said.

"So you have the domestic security agency, DHS, being able to reach into the NSA in a real time way to get the kind of protections that we need," he said.

The arrangement would hopefully provide better security for both military and civilian networks, he said.

Civil liberties groups have voiced concern over the role of the NSA in cyber security efforts inside the United States, saying privacy rights could be jeopardized.

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