The average office worker spends as much as an hour and a half per week whilst at work surfing the web for personal use.
The CBI, the business lobby group, estimates that this is costing the economy as much as £10.6bn per year.
Its research showed that while many organisations are supportive of staff visiting non-work related websites (only 14% of firms restricted web access altogether)others are troubled by the amount of use, or have had to sack staff for serious abuse.
According to the results, nearly two-thirds (60%) of employers think staff regularly use office time outside of lunch hours and formal breaks to look at non-work sites, like those involving social networking, web email, shopping and holidays.
Employers across the public and private sectors estimate that 4.4% of working time is lost in this way, which accounts for 95 minutes a week, or 10 days a year, at an average annual cost of £939 per employee.
John Cridland, CBI deputy director-general, said: "Nobody wants to behave like Big Brother and there is no epidemic of misuse, but there needs to be a bit of give-and-take from all parties. Employers need to decide for themselves what level of non-work surfing is acceptable and then set out clear boundaries."
Organisations, both private and public sector, with 200-499 employees suspected the highest proportion of working time lost to leisure-surfing (5%), while the lowest rate (2.7%) was reported by those with 5,000 or more staff. This may be because larger firms have clearer usage policies or have installed IT systems that regulate web usage, said the CBI.
A third of respondents disciplined an employee for internet misuse during 2007, while 13% took action to dismiss an employee for persistent misuse. Examples include:
* A law firm disciplined an employee after discovering he often played several chess games simultaneously with players across the globe.
* An employee of an insurance company was dismissed for spending entire working days playing a fantasy role-playing game.
* A local government authority sacked one of its staff for running an eBay business from the office computer, and using the authority's address in communications with buyers and sellers.
Just over 500 organisations were quizzed as part of the survey.
In a seperate study, by recruitment website Monster, over half of workers said they spent time at work booking their summer holidays.
The results show that 32% of workers are carrying out the whole process, from initial research through to booking the trip, whilst in the office, with 24% admitting to spending a 'little bit' of time doing so.
However, according to Julian Acquari, managing director of Monster, UK and Ireland, there is nothing wrong with taking a bit of time out whilst at work:
"Employees are perfectly entitled to spend their lunch time carrying out personal business, in fact recent research has shown that time spent doing non-work related activity on the internet or 'ebreaks' often has an energising effect and boosts productivity. However there is a fine line and employees should ensure they are not spending excessive time using the phone or internet for personal activities."