Reports of the death of the high-profile Neo Project Xbox digital rights cracking effort have been greatly exaggerated, it has emerged today.

It had been widely reported that the attempt to break the encryption algorithm used in Microsoft's Xbox game console had been abandoned because of "legal reasons". But the distributed group of Neo code hackers has announced that the game is back on.

The Neo Project website claimed that attempts to break the encryption algorithm had been resumed, and said: "We're back and back strong!"

The group added: "With the recent media frenzy we stopped the project to research the legal aspect before proceeding any further."

The Neo Project began at the start of this year to try to crack Microsoft's private RSA-576 key by using a distributed computing network.

This move followed RSA Security's original RSA-576 Factoring Challenge, posted last July, which offered crackers $10,000 to break the encryption algorithm.

The Neo Project now says it has found "an interesting mathematical property of the RSA-576 number", according to an IDG report, and is still hopeful that it can crack the code and win the prize money.

It will then focus on Microsoft's implementation of the algorithm used for digital rights management in its Xbox console.