News of the Wonderland scandal is spreading through the UK press. Channel 5 News led with the piece - it's all over Sky News. Some of the UK's largest tabloids are picking it up - outlets with millions of readers. UK business magazine, The Business, has just taken up the story.

"users feel the virtual community is unsafe and uncensored; they're also deterred by the huge amount of sexually orientated activity which takes place in the world."

The Business magazine slams Linden Lab for their "unshakeable libertarian positions", and says "This will be a huge set back for Linden Labs [sic]".

Expect to be reading and hearing a lot more about this in the news in the coming days.

Of course, this activity directly contravenes Linden Lab policy - so, why didn't they act days or weeks ago, when this activity was reported to them?

We have been promised an official comment or statement from Linden Lab "shortly". That was nine hours ago.

[Update: 10PM SLT (US Pacific) - Linden Lab has just issued a formal response]