Russia has yet to take the millennium computer bug problem seriously and could face catastrophic consequences if it does not act quickly, U.S. and Russian business representatives said on Wednesday.

Their warnings came on top of alarm bells rung by the U.S. Defense Department that difficulties overcoming the problem in Russia could cause "nightmare" military scenarios."The effect on businesses in Russia will be catastrophic if computers are not fixed before January 1 in the year 2000," said Scott Blacklin, president of the American Chamber of Commerce.

"The year 2000 issue can be solved if planning and fixing starts now," he told a news conference held to launch a campaign to raise awareness among government and business officials.

Experts say Russia should face less of a problem than Western nations because it has far fewer computers and because older Soviet computers were designed differently.

Still, Blacklin said the issue was "of deep concern to members of the international community," since they could be affected by any problems that arose if computers malfunctioned.

In a survey of 50 Russian companies by consulting group Coopers and Lybrand, only a third - all large financial institutions - said they were aware of the problem.

But Coopers and Lybrand partner Pat Kelleher, who said he was one of the programmers who had caused the problem 25 years ago by using two-digit dates to saving memory, was concerned Russian banks thought they were immune to the millennium bug.

"Banks don't seem to think they have a problem," he said.

He said this was a logical assumption as most had only existed about five years and had put in their own programs but that it failed to take account of old software hidden in all electronic equipment.

Valeri Vlasov from the Russian Chamber of Commerce said experts had begun discussing the millennium problem in Russia some years ago but it was only now being taken seriously.

On May 13, Prime Minister Sergei Kiriyenko issued an order instructing the government bodies to address the issue. "The process of replacing equipment must be completed by the end of the year," he said.

The biggest-risk areas - the nuclear industry, radar and air traffic control and defense - were included in the government's program, said a statement issued at the news conference. But it questioned how much progress had been made.

"Efforts to address the year 2000 problem for the defense industry appear to be in their natal stage," it said.

The U.S. Defense Department said two weeks ago it planned to offer to share early warning information about nuclear weapons to stop a possible panic reaction by Russian defense officials if their computer screens go blank.

Officials from the State Telecommunications Committee, which is overseeing Russia's millennium compliance program, were not immediately available for comment.

One Russian official, contacted by telephone, expressed just the view the businessmen and U.S. defense officials fear most.

"It's a long way off," he said.