The UK is among the best in Europe at providing public services online, but Britons still need some persuading to use them, say researchers.
The government wants to get most of its services online
While people can renew passports and book driving lessons, they are more likely to use the internet to shop.
An EC report ranked the UK third out of 28, after Sweden and Austria, in its online public service "sophistication". A year earlier it was eighth.
The survey covered 14,000 public bodies in Europe in the last quarter of 2004.
It looked at online access to things like income and corporate tax, car registration, benefits and custom declarations.
Source: EC report on "sophistication" of public services online
The survey ranked Sweden and Austria as having the most sophisticated online provision - the extent to which a service is provided, from downloading information to filling in forms electronically.
Graham Colclough of researchers Capgemini, said internet services were bound to be better used in countries with more dispersed populations.
But the fact that the UK was doing better than countries like France and Germany was "something we should be quite proud about", he told the BBC News website.
Iceland, Germany, Italy, the UK, and Belgium were singled out as making "important progress" in the fifth annual e-government benchmarking report.
The new EU accession countries were about two years behind the others, but had "very satisfactory" online provision, it found.
The report found that in most countries "income-generating" services, such as paying taxes, were the best developed.
Those that do not bring money in, such as applying for licences and planning permission, are less so, the report found.
Most "e-transactions" are carried out by businesses, and persuading ordinary people to use websites to use public services was still a problem, said Mr Colclough.
"People are much more comfortable dealing with the private sector than the public sector," he said.
"If you're online at your local supermarket, you know the experience is relevant to you and know it's going to work - you don't have that same level of comfort with public services so we have to work on that."
He said that public sector websites needed to be made more consistent and easier to use and be better promoted.
A Cabinet Office report last year found 48% of the adult population in the UK was "digitally disengaged".
The Alliance for Digital Inclusion has been charged with finding ways of persuading them to use the net and other new technologies.