Hi bentleigh and welcome.

Do i need a new mouse or is this a computer problem?

I don't know. The best way to find out is to try another mouse. Borrow one or buy an inexpensive one to have on hand as a spare or testing. The switches and scroll wheels do wear out. Do make sure the cable did not just wiggle loose.

Did this problem suddenly start? Does it happen every time? Often, just blasting out the all the cracks and crevices with compressed air or canned dusting gas does wonders to fix a flaky mouse.

Do make sure your system is free of malware too, just in case. I recommend you purge your system of clutter using Windows (XP or Vista) Disk Cleanup, ATF Cleaner or CCleaner. If you use CCleaner, then during installation, uncheck the option to install the Yahoo toolbar and before first use, go to Options > Settings > Advanced and ensure Only delete files in Windows Temp folders older than 48 hours is unchecked.

Note: Ensure you know your site credentials (user name and password) for sites you frequent before cleaning; you may have to login again at next visit.

Then download, install, update, and run Malwarebytes's Anti-Malware (MBAM) to ensure your system is free of malware. Then do the same for all other computers on your network (everything on your side of the Internet gateway, typically a cable/DSL modem).