He would be able to order popular search engines such a Google and Yahoo to suspend access their websites in times of national emergency.
Other US based Internet service providers as well as broadband providers would also come under his control in times of a 'cybersecurity emergency.' Any company that failed to comply would be subject to huge fines.
Critics of the new law, which has been proposed by former presidential candidate Joe Liebermann, said it would be an abuse of power to let the White House control the internet.
TechAmerica, one of the largest U.S. technology lobby groups, said the new law had the 'potential for absolute power.'.
The proposed legislation, introduced into the US Senate by Lieberman who is chairman of the US Homeland Security committee, seeks to grant the President broad emergency powers over the internet in times of national emergency.
A sustained terror attack on multiple cities would be considered a national emergency as would a cyber attack by 'hackers' on the US financial system.
The director of National Intelligence Dennis Blair warned earlier this year that the US is 'severely threatened' by malicious cyber attacks.
The number of attacks on Government departments has increased by 400 per cent in the last three years.
Under the proposed bill, which has been dubbed an Internet kill switch', the US Government would effectively seize control of access to the internet.
Lieberman argued the bill was necessary to 'preserve those networks and assets and our country and protect our people'.
He said: 'For all of its 'user-friendly' allure, the Internet can also be a dangerous place with electronic pipelines that run directly into everything from our personal bank accounts to key infrastructure to government and industrial secrets.
Traders work on the New York Stock Exchange floor. US senators fear a cyber-attack on the US could paralyse the nation
'Our economic security, national security and public safety are now all at risk from new kinds of enemies--cyber-warriors, cyber-spies, cyber-terrorists and cyber-criminals.'
His bill is formally titled the Protecting Cyberspace as a National Asset Act, or PCNAA.
While the US Government would not be able to control the internet in other countries access to the most popular sites would be cut off.
Google,Yahoo and YouTube, the top three most visited sites, are all based in the US.
Google logs an estimated two billion hits a day from 300 million users.
Under the cyber law any company on a list created by Homeland Security that also 'relies on' the Internet, the telephone system, or any other component of the U.S. 'information infrastructure' would be subject to command by a new National Centre for Cybersecurity and Communications (NCCC) that would be created inside Homeland Security.
Google, the world's most popular search engine, refused to comment. A spokesman said the law was not yet Government policy.
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