Masato Nakatsuji, 24, a graduate student at Osaka Electro-Communication University, was arrested on Thursday on charges of illegally copying and distributing an image from the Japanese TV animation programme Clannad.

But he is also suspected of embedding the 'Harada virus' in the image, local media reported.

This is the first time a virus creator has been arrested in Japan, which has no law against malicious computer programmes.

A Kyoto police officer said police had considered other charges, including damage to property and obstructing business, before deciding that copyright violation charges would best hold up in court.

Police said Nakatsuji will not be contesting the charges.

The maximum punishment for copyright infringement is up to 10 years in prison and 10 million yen (S$132,000) in fines.

According to The Asahi Shimbun, the virus was spread via Winny, a popular file-sharing application in Japan.

Computer users who downloaded the image with Nakatsuji's virus had their data destroyed. Information stored on the computers was also leaked on the Internet.

The extent of the damage has not yet been disclosed.

Nakatsuji, who admitted creating the virus, was quoted by Asahi as saying he thought 'the impact would be great if a popular anime was used'.

He is also suspected of creating and spreading other computer viruses.

Police also arrested Shoji Sakai, 39, a company employee in Osaka, and Katsuhisa Ikema, 35, an unemployed man in Hyogo, for allegedly distributing the image via Winny.

The government-affiliated Information-Technology Promotion Agency received reports of 34,334 cases of virus infections last year, Asahi said.

The figure is a decrease from 2005, when virus infections peaked at 54,174.

But officials believe the figure represents only part of the picture.

Japan has been criticised for being slow in passing legislation to crack down on those who make or spread computer viruses.

In 2001, it signed the Convention on Cybercrime in which signatory countries cooperate to tackle Internet-related crimes.

A revised Bill of the Penal Code was submitted in 2004 to the Diet, Japan's bicameral legislature, to regulate the creation of computer viruses.

Such a regulation is mandatory to conclude the convention.

However, the Bill has not been enacted yet following a dispute over a stipulation regarding conspiracy.

ASSOCIATED PRESS