In the first case of the US seeking extradition of an alleged hacker, Gary McKinnon, 36, from Hornsey, north London, was indicted last night on eight counts of computer-related crime involving $900,000 (about £570,000) of damage to military and Nasa computers in 14 states.

Paul McNulty, the federal prosecutor dealing with the case, said Mr McKinnon, using the codename Solo, had carried out one of the "biggest military hacks ever".

Prosecutors said he had gained access to a military computer network in Washington and installed his own software, allowing him to control the system from Britain. By changing and deleting files he caused the entire network, with 2,000 users in the Pentagon and in other bases around Washington, to crash. It was out of action for three days in March this year.

American investigators approached British police after one of the hacking victims established that the attack had been launched from a British computer. Officers from the national hi-tech crime unit traced the attack to Mr McKinnon, who now faces seven counts of computer fraud, each with a maximum sentence of 10 years and a $250,000 fine.

Police sources described him as a "serious hacker" who had accessed the computer systems of "the most high-profile organisations you can think of in the US" to "make a point".

He will not be taken into custody before the extradition process, understood to be little more than a formality, begins.

Although the information Mr McKinnon accessed is understood to have been unclassified, the indictments in northern Virginia and New Jersey accuse him of hacking into a network of 300 computers at the Earle Naval Weapons Station in Colts Neck and stealing 950 passwords immediately after the terror attacks on New York and Washington, shutting down the system for a week. The station handles munitions and supplies for the Atlantic fleet.

"This was a grave intrusion into a vital military computer system at a time when we, as a nation, had to summon all of our defenses against further attack," said US attorney Christopher Christie. Mr McKinnon is also accused of mounting attacks on two Pentagon systems.

The decision to prosecute in the US illustrates American frustration at the collapse of previous transatlantic hacking trials in this country. The most embarrassing involved two young British hackers who were accused of mounting a determined "information warfare" campaign against the US air force and leading defence contractors in 1994.

During that investigation, Senate hearings were initially told that the intrusions were the work of highly skilled foreign agents, first from Latvia, then from North Korea.

But the attacks were traced by British police to two amateur hackers. Matthew Bevan, then 23, and his 16-year-old accomplice, Richard Pryce, had carried out their haphazard campaign on an ageing PC.

Pryce was fined £1,200 in 1997 but the case against Mr Bevan collapsed after the judge was told that he had posed no threat to security.

Last night, Mr Bevan, from Cardiff, said he believed the latest case was being similarly overblown. "I know how the American propaganda works because I've been at the sharp end of it. If he is extradited he is stuffed because they will want to make an example of him."