The contract is to develop a 10w fuel cell by 2008, and then extend the technology to cover as many Olympus products as possible.
Mobile phones and PDAs typically consume about 2w but the power demands of Olympus' main product line of cameras are considerably higher.
Hal Kruth, managing director of security and commercial ventures at QinetiQ, said: "QinetiQ is delighted that Olympus has recognised British expertise in this field. As consumer technologies converge, this research could have a far-reaching impact."
The potential size of the fuel cell market for such portable devices is predicted to be $11bn by 2013, according to independent market data from Wintergreen Research.
"Fuel cells are the future for portable power, and with QinetiQ's help we aim to be at the forefront of the technology," said Atsushi Yusa, head of the Future Creation Laboratory at Olympus.
The key focus of the contract will be to develop hydrogen fuel cells, rather than the more common methanol-based systems being developed and used today.
Solid hydrogen fuel cells have the potential to offer much more power, and do not suffer from the health fears surrounding the use of methanol systems.
QinetiQ was formerly the Defence Evaluation & Research Agency, and the Ministry of Defence still owns a majority shareholding,
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