Pirate copies of Microsoft's new operating system software, Windows XP, are already on sale ahead of today's official product release. This is despite a controversial new anti-piracy system which means users of XP software will have to telephone Microsoft to validate their purchase.

Some computer shops in Malaysia were advertising illegal copies of Windows XP for about $2.60 (€2.91) yesterday. The professional version of XP costs £287 (€364) here. The home edition costs £197.

Reacting to the discovery, Mr Butt Wai Choon, Microsoft's managing director in Malaysia, said software piracy was a serious issue in the country.

"It is alarming to see Malaysia becoming a hub for producing counterfeit products," he said.

Mr Joe Macri, country manager for Microsoft Ireland, said the illegal copies currently on sale were beta (test) copies of Windows XP and not the full version.

He said he didn't know if pirate copies of XP were available yet in the Republic.

Pirate copies of Microsoft's test version of XP are recognisable by a build number which is shown in the bottom right-hand corner of the desktop screen.

Windows XP incorporates a product activation system which uses the hardware configuration of a computer to generate a machine-specific ID code to prevent copying.

This works by making legal users of XP contact Microsoft to quote their own specific ID code to validate their software sometime after purchase.

However, following the release of the full XP version today Microsoft does not discount the possibility that hackers will break the key code of its anti-piracy feature.

"The activation code could be leaked," said Mr Macri. "If a professional thief wants to steal a car there is no absolutely foolproof way to stop it."