LONDON (Reuters) - Police have arrested three men in an investigation into attempted robberies of Internet banks, including well-known Egg Plc., and have warned that bank robbers are turning to a new weapon -- the computer.

Police said the men were arrested in a swoop on their homes north of London Tuesday, after a six-month investigation into Internet fraud against Egg, one of the UK's highest-profile online banks with about 1.1 million customers.

``We are not prepared to discuss the detail of the fraud but we can confirm that our inquiries now indicate that it is possible that other Internet banks... may also have been victims of similar fraud,'' the National Crime Squad said Wednesday.

The arrests came at a bad time for investors, already spooked by a string of recent e-commerce security scares. Egg shares were down 3.7 percent around midday at 143-1/2 pence.

A spokeswoman for the squad, which is investigating the Egg case, said the possibility of attacks on other online banks came to light after studying the arrested men's computers. The squad was contacting the other banks but declined to identify them.

Egg confirmed it had been the target of a fraud sting on Wednesday but said its security systems were never breached and that no money was stolen. But police insisted Egg had lost money and said it amounted a small sum, in the thousands of pounds.

Six Months To Find Smoking Gun
A source familiar with the case said a gang was thought to have made multiple, bogus applications for loans and savings accounts. Police said Egg had raised the alarm, prompting a six-month investigation which culminated in Tuesday's arrests.

Egg confirmed ``fraudulent applications'' had been served on the bank but neither Egg nor the police would elaborate.

Egg said it had worked with police to develop software to trace the gang. ``This software was installed two months ago and directly led to the arrests we are hearing about today,'' Egg spokeswoman Poppy Nagra told Reuters.

``At no time has Egg security been breached and absolutely no money has been fraudulently obtained through this activity.''

Prudential, Egg's majority owner, assured customers on Wednesday their money was safe: ``We confirm Egg's security remains unbreached and customers' money is secure.''

National Crime Squad officers made Tuesday's arrests in an early-morning raid on seven homes within a tight radius around Milton Keynes. The men arrested were in their 30s.

Police confiscated computer equipment, documents, cash and drugs during the raid, a police spokeswoman said. The three were released on bail Wednesday without being charged.

Bad Timing
A National Crime Squad spokeswoman said the case highlighted a new and alarming phenomenon -- organized crime on the Net.

``These criminals had used the Internet in order to commit this crime,'' the spokeswoman, Judi Prue, told Reuters.

``This obviously is a very new area criminals are getting into and expanding into, so it's something in which we have really got to keep one step ahead of them.''

The break-in follows a string of security concerns about Internet banking in Britain. In July, Barclays Plc briefly shut down its Net banking service after a glitch in new software allowed some users to see other customers' accounts.

A report issued in August after the Barclays incident highlighted the dangers in e-commerce. Britain's National Consumer Council said online shoppers were nervous about releasing credit card and personal details on the Web.

Internet analyst Mamoun Tazi, of investment bank Schroder Salomon Smith Barney, said investors in e-commerce stocks were nervous about online security.

``This is not the right time for this to happen,'' he said.

Online banks were in a race to stay ahead of criminals as both sides obtained more and more sophisticated equipment. ``It will be an ongoing affair between the banks and the hackers.''

In recognition of the challenges posed by cyber crime, the National Crime Squad and other UK law-enforcement agencies are in the process of forming a joint high-tech criminal unit in an attempt to keep one step ahead.