The huge jumps in some Internet stock values are difficult to understand and are akin to a gold rush for some investors, Mr Vinton Cerf, MCI/WorldCom senior vice-president, has said.

He also predicted that there would be 300 million Internet users worldwide by the end of 2000.

Mr Cerf, who is known as the "Father of the Internet" and who was a member of the Advisory Committeee for Telecommunications to Public Enterprise Minister Ms O'Rourke, said investments are usually based on earnings, but in many Internet companies there are no earnings.

He said for some it was akin to a gold rush.

However, he said, it should be remembered that not all the gold diggers became rich.

Quite often, he said, it was the person supplying the picks and shovels who became rich.

He said it could be argued that MCI/WorldCom was supplying the picks and shovels - in this case the Internet infrastructure to enable people to do the business.

Mr Cerf forecast there would be around 300 million Internet users by December 2000.

"Some say there will be 1,000 million, but I doubt manufacturers can produce enough computers by this time," he said. At present, he said, there are 165 million Internet users around the world.

"It is a very small number," he said, "considering the world's population is 6.6 billion - and there are also 830 million telephone terminations. "Despite the hype, the number of Internet users is still very small."

He said of the 165 million users, 90 million were in the US and Canada. Europe accounted for only 40 million users. Mr Cerf, who was addressing a press conference in London, said that there are three million websites worldwide and 8,000 Internet Service Providers (ISPs).

Of these, 4,700 ISPs are in Europe.

Mr Cerf, who is senior vice-president of Internet architecture and technology at MCI/ WorldCom, which has in excess of 2,000 corporate customers in Ireland, said the Internet could help companies reduce inventories.

He said companies trading on the Internet could manufacture to very specific demands.

Mr Cerf said Cisco Systems, which sells $20 million of orders per day through its website, had made annual savings of around $550 million through this method.

He added that research by Forrester had estimated that business on the Internet would have an annual value of $327 billion (£233 billion).