Microsoft has given its strongest hint yet that Windows 7 will be in the shops by Christmas.

The company confirmed in a webcast today that Windows 7 will be released to manufacturing (RTM) three years after the RTM version of Vista was released. Vista went RTM in October 2006.

"The goal for Windows 7 RTM is to be three years after Windows Vista RTM," said the company in response to a question.

The webcast, hosted by Microsoft technical fellow Mark Russinovich, went over some of the new features of the forthcoming operating system. These include better power management, a reduced processor footprint and better applications control.

"We spent a ton of time on battery time," said Russinovich, claiming that Microsoft had reduced the power footprint of over 400 parts of the operating system, and is still making more improvements. These include managing power but still ensuring speedy performance.

"Performance was a huge problem with Vista," said Mark Manasse, principal researcher at Microsoft Research. "But I was pleasantly surprised. I've run it on bespoke and virtual systems and am very impressed by the way it runs."

The new operating system will also have a Power Configuration function, which scans the machine in a minute and then lists recommendations for cutting power output.

Microsoft has spent a lot of time trying to avoid the compatibility problems that dogged people moving from XP to Vista.

"When we sat down in one of the open meetings at the start of the project we came up with certain goals," said Erik Lustig, a senior product manager responsible for Windows Fundamentals

"If it worked with Vista it should work with Windows 7, and if it runs Vista it should run Windows 7 faster."