Microsoft ups the security ante

Microsoft is to improve Windows security by creating a virtual 'vault' where customers can conduct electronic transactions and store sensitive information.

The drawback is that the vault, dubbed Palladium, will mean that consumers will have to buy new computers and other devices equipped with ultra-secure processors.

Microsoft explained that the technology will not be available for at least 18 months and is a spin off from its attempt to create digital movies that could not be pirated.

Company officials have told executives in private briefings that they do not expect to see mainstream products for at least five years.

David Farber, former chief technologist at the Federal Communications Commission, said that he was "somewhat satisfied" with Microsoft's plans, but will watch closely to ensure that the software giant does not try to use Palladium to control the world's software markets.

The technology could distinguish safe software from data containing viruses or other malicious computer code.

Customers could store personal details within this part of Windows, such as financial or medical records, which would be encrypted and otherwise inaccessible even from other software running on the computer.

Microsoft's efforts are similar to those of the Trusted Computing Platform Alliance, an industry group working on hardware technology to let computers recognise 'trustworthy' software.

IBM has already shipped new laptop computers featuring such security chips.

Intel and AMD, the world's largest chipmakers, will redesign processors to include cryptography features for Palladium.

It will need video and keyboard adaptations to ensure that a customer's typed information is displayed without changes on the screen.