A teenager believed to be a leading member of the Anonymous and LulzSec hacking groups has been released on bail.
Jake Davis, 18, who goes by the online nickname of "Topiary," has been charged with five offences under the Computer Misuse Act and other acts, including unauthorized use of a computer system.
He is accused of being involved in attacks on Sony, the Serious Organised Crime Agency (SOCA), the NHS and News International.
Davis, who spoke in court only to confirm his name and date of birth, has been released on bail after agreeing to stay at his family home under strict terms, which includes no internet access and living under a curfew.
His lawyer Gideon Cammerman said that while there may be evidence that Davis was linked to the groups, there was no evidence to show he had taken part in any of the hacks.
"The picture that emerges is not one of a skilled and practised hacker but of someone who sympathizes," he said.
The arrest of Davis in the Shetland Islands is a significant point date in the global effort to end the cyber-crime spree by the activist groups, who describe themselves as fighters for internet freedom.
Anonymous and LulzSec members have been arrested in the United States, Spain, Turkey, Britain and the Netherlands after cyber attacks on targets including the CIA, Sony and Rupert Murdoch's UK newspaper group News International.
Many of the attacks have targeted organizations seen by the activists as enemies of free speech, such as EBay's PayPal online payment system, which stopped processing donations to WikiLeaks last year.
The UK Serious Organised Crime Agency (SOCA) took its website offline for several hours on June 20 after it appeared to be the victim of a distributed denial of service attack.
LulzSec claimed responsibility for the attach, which worked by overwhelming the target's web servers with requests so that they can no longer respond, causing websites to freeze or crash.
Anonymous also claims to have broken into Apple servers in July, after launching attacks in December that temporarily shut down sites of MasterCard and Visa using simple software available on the internet.
Police seized a Dell laptop from Davis's home in Shetland with a 100 gigabyte drive running 16 different virtual computers, the prosecution said.
Files found on the computer included details of an attack on Sony, email addresses and passwords of hundreds of thousands of members of the public and hundreds of other folders that had not yet been examined, the prosecutor said.
When police arrived to arrest Davis, his computer screen was displaying a dialogue box for a single-use email address with a lifespan of 10 minutes, the prosecution said. Forty other applications were also running.
Davis, who has no previous criminal convictions, is due to appear for his first trial hearing on August 30 in Southwark Crown Court, London.