Australia"s IT sector dominated investment in the U.K. in the 2004/05 financial year.

U.K. Trade and Investment director general in Australia, Tim Holmes said the number of Australian businesses expanding into the U.K. last year more than doubled.

The 2004-05 U.K. Trade & Investment report, released today, said 42 Australian companies made new investments in the U.K., ranking Australia second in the Asia-Pacific region behind Japan.

Australia"s innovation and service enterprises led the way with seven from the information technology sector, four environmental services companies, three from the finance sector and three healthcare organizations.

"Australia is punching well above its weight in international markets," Holmes said.

"The growth is coming from Australia"s traditional big hitters in the resources sector, and companies that have achieved market leadership locally with world-class R&D.

"Over the last 18 months we"ve seen a huge increase in Australian companies seeking our advice and assistance to start operations in the U.K."

Holmes said the trend is being driven by Australia"s technology and services sectors.

More than 1,200 Australian businesses have offices in the U.K.

The value of these businesses makes Australia the fifth largest foreign investor in the U.K.