The annual survey of National Health Informatics Competency found that most of the service's 500,000 clinical staff fail to meet the recommended level of competency in basic computing, computer systems and information management.
Martin Sotheran, head of delivery at the NHS Information Authority, said, "Work still needs to be done to raise the basic understanding of literally thousands of NHS staff."
The findings illustrate the enormous challenge facing the health service to implement the Government's Information for Health strategy by 2005, he added.
Information for Health, launched in 1998, is the Government's long-term information strategy for the NHS. It includes life-long electronic records for everyone in the UK and 24-hour online access to patient records.