A Peruvian congressman is planning to have Microsoft products banned from government departments and replaced with open source software.

Edgar Villanueva's measure would apply to all software, from server operating systems to databases, word processors and email.

If passed, the legislation could be the first of its kind in the world and would be the first legal restriction aimed at Microsoft's dominant operating systems.

Poorer governments in Latin America and elsewhere have immense trouble stumping up payments for software licences from the likes of Microsoft, and Villanueva is hoping that open source would mean big savings without losing functionality.

The congressman explained that the Peruvian state owes about $30m in overdue software licence fees. A government study last year estimated that the country would have to pay $18m in licensing fees to cover the pirated software it uses.

Many government PCs still run Windows 95 and about a third still use the outdated Pentium II processor. But Villanueva told Reuters that budget savings are not the goal of his proposed law.

"Our philosophy is to try to give access to technology to the most people possible, especially young people, and the state should play a fundamental role in that process," he said.

Villanueva hopes that his measure will trigger activity in Peru's software industry by freeing programmers from the constraints of working with coding controlled by a few large companies.

Microsoft said that the legislation is based on misconceptions and unproven theories.

Along with Peruvian software companies, Microsoft has lobbied congressmen, government officials, academics and businesses and seems to be getting some support from Peru's government.

The office of the chief of Peru's cabinet has already voiced opposition to the measure.

Microsoft Peru expects $27m in sales this year, which would generate about $70m for local businesses, according to a Redmond spokesman.

Rolando Liendo, president of the Peruvian Association of Software Developers, insisted that the country's fledgling software industry, which produces $40m a year in mostly proprietary software, could be hit hard by Villanueva's legislation as roughly a quarter of its business goes to the government.