The re-classification, expected to be revealed next month, is a warning to countries that may try to sabotage America's electricity grid, subways or pipelines using an internet based attack.

The move comes as the Chinese army last week announced the formation of an 'On-line Blue Army' of cyber experts to help 'defend' military and civilian infrastructure against outside attack.

Speaking to the Wall Street Journal about the move, a senior military source said: 'If you shut down our power grid, maybe we will put a missile down one of your smokestacks.'

The newspaper, citing three officials who had seen the document, said the the strategy would maintain that the existing international rules of armed conflict - embodied in treaties and customs - would apply in cyberspace.

It said the Pentagon would likely decide whether to respond militarily to cyber attacks based on the notion of 'equivalence' - whether the attack was comparable in damage to a conventional military strike.

Such a decision would also depend on whether the precise source of the attack could be determined.

One of the problems with cyber attacks is that it is so difficult to trace their origin. Read More