The Inland Revenue is considering replacing its Microsoft PC software with an open source alternative, vnunet.com's sister title Computing can reveal.

The Revenue has held high-level talks with Sun Microsystems about plans for its 70,000 desktops.

Senior US-based Sun executives visited the UK to discuss the issues involved in migrating Windows and Office users to Linux and Sun's StarOffice software.

Many of the Revenue's PCs run NT4 Workstation software, which Microsoft will cease to support from June next year.

And a senior IT executive at the Revenue has said that there are no plans to upgrade to newer versions of Windows, such as 2000 or XP, a member of Sun's management team told Computing at its Sun Network conference in San Francisco.

The Revenue announced in July that it plans to buy 30,000 PCs next year, which would provide an opportunity to phase in a new desktop environment.

Many large Microsoft users are investigating an alternative to Windows, following the software giant's controversial changes to its licensing policy, which came into effect on 1 August.

If the Revenue, one of Microsoft's highest-profile UK customers, changes its desktop policy and adopts a rival technology, it would be a huge blow for the supplier.

Earlier this year, Whitehall purchasing arm the Office of Government Commerce agreed contracts with Microsoft and Sun that allow all public sector agencies to buy software at preferential rates.

The Revenue is keen to explore its options under the deals. "With our technology partners we are always looking at new products to give us wider choice and better value for money," said a spokesman.

Last week, Sun announced plans to offer fully-supported, packaged open source desktops to customers.

Chief executive Scott McNealy claimed that, compared with Windows, the Linux-based PC would be "half the cost at acquisition and maybe less than half the operating costs".

Many firms have avoided using open source software for PCs because of concerns over support, but the backing of a major player such as Sun is likely to make it a more realistic option.

Microsoft declined to comment.