Speaking at the Microsoft Government Leaders conference in Seattle, E-envoy Andrew Pinder revealed to VNU News Net that a copy of the Government Gateway has been sold to one country by Microsoft, and that discussions continue with several others.

This is the first time Whitehall has gained revenue from an IT project

Previously the intellectual property rights were held by the supplier, whocould then resell it as they saw fit.

The Gateway was developed on Microsoft technology but the intellectual property is owned by the UK government. Under the deal with Microsoft signed in August last year, the UK gets a slice of revenue every time Microsoft sells the Gateway on to another country.

The Gateway is the heart of plans to put all public services online by 2005. It will allow citizens and businesses to interact with government departments over the internet.

The contract allows Microsoft to market the technology developed for the Gateway to other governments, but the UK government retains ownership of the source code.

Every time a sale is made, the government receives a 24% royalty, and will also be given free upgrades of any new functionality Microsoft develops for another country.

When the deal was signed, a Cabinet Office spokeswoman said the government expects to make a 'substantial return' on the £15.6m cost of developing the Gateway.