Police have shut down China's biggest website for hackers and arrested three people suspected of selling malicious software and other hacking services, state media said Monday.

The police in the central province of Hubei arrested the three owners of Black Hawk Safety Net, a specialist hacking website that registered more than 170,000 free members, the China Daily newspaper said.

The website also collected about 7 million yuan ($1 million dollars) in fees from 12,000 VIP members, the newspaper said.

Since it was set up in 2005, the website had 'disseminated hacker techniques through lessons, Trojan software and online forum communications', it said.

About 50 officers had investigated the website since police linked several members to a virus attack in Hubei's Macheng city in 2007.

Some hackers who used the site had seized control of online accounts for their own entertainment while others hacked into bank accounts with the aim of stealing money, the newspaper said.

'Basically, students were told how to steal accounts and use Trojan programs,' one unnamed 20-year-old was quoted as saying of the website's training for hackers. 'Sometimes, trainers show us how to write programs.'

Hackers caused estimated economic losses of 7.6 billion yuan for China's 380 million Internet users last year, according to the government.

News of the arrests came amid a diplomatic spat between China and the US after Internet giant Google Inc said it was reviewing its operations in China following 'a highly sophisticated and targeted attack on our corporate infrastructure originating from China'.