Government Gateway to be done the Gates way

The software giant will take the lead in the Government Gateway project after rival firm Compaq dropped out of negotiations with the Cabinet Office. Microsoft has been contracted to deliver a middleware system that will allow businesses and citizens to access government services over the internet. The system will be based on its XML-powered BizTalk technology and Windows 2000.

Microsoft was brought into the project 12 weeks ago, when negotiations between the government and Compaq broke down. Microsoft has a team of 60 people working on the project to hit the deadlines the government agreed with Compaq.

Alistair Baker, director of enterprise computing at Microsoft, said the first code is already coming through, and his team will meet the 25 January deadline for delivery of an enrolment and registration system. Baker said the heart of the project - a transaction engine - will be up and running by March.

He said: "This will show the market what can be achieved with Microsoft technology. It will be a big, scalable, robust system."

Tony Blair earmarked £1bn for the project when he announced UK Online in September. Cable & Wireless will provide the infrastructure, Dell will supply most of the hardware, Viacode will handle authentication services, and PA Consulting will provide support services.

Customs and Excise, the Inland Revenue and the Ministry of Agriculture, Fisheries and Food will be the first departments to offer services on UK Online.