The updated version of the Computer Misuse Act could have "chilling effects" on how security researchers go about publicising their work, according to experts.
Speaking at a round table debate in London, experts said that the amended act would make it easier for companies to threaten legal action against any security researcher who publicises vulnerabilities in hardware and software.
"It's quite possible that people within the security industry will be served with take-down notices from companies whose flaws have been exposed even if the CPS (Crown Prosecution Service) has no intention of prosecuting," said Malcolm Hutty, Head of Public Affairs, London Internet Exchange (Linx).
Hutty also warned that the multitude of websites that carry software tools to carry out penetration testing on networks could also be under threat.
"If you are a good guy you will take the widest possible interpretation of the law and that could mean erring on the side of caution and closing your site down in order to avoid prosecution," added Hutty.
The amendments to the Computer Misuse Act make it a criminal offence to "make, adapt, supply or offer to supply any article intending it to be used to commit, or to assist in the commission of, an offence under section 1 or 3 of the Act or believing that it is likely to be so used."
The clause is intended to outlaw so-called "hacker" tools and this could result in researchers pulling penetration testing tools from websites if could be proved that the tools could also be used for criminal purposes.
Hutty said that many Linux distros sites could also be in trouble as many of them contain tools such as port scanners and tcp dumps used to carry out security audits. "These may be taken out if laws against hacking are enforced by the letter of the law," he said.
Academics said the laws could force security researchers to leave the country.
"This law could potentially push security researchers out of the country," said Dr Richard Clayton, researcher in the Security Group at the University of Cambridge.
Clayton said that the law could be used by some companies to cover up flaws in software.
"People are starting to think about resorting to legal means when dealing with security problems," warned Clayton. "It is going to make us think carefully about talking about security exploits and cautious about publishing tools."
