Microsoft has announced plans to cut the cost of its Windows Vista operating system bought through high street retailers.

The company has yet to give a firm date as to when the price cut will come into effect but has confirmed the price will fall from £201 to £161.

The move is being seen as a bid to increase the number of customers upgrading to Vista from other platforms following its full rollout in 2007.

But the vast majority of Vista sales are through PC manufacturers, which sell machines with the operating system already loaded. Only about 10% of Vista sales come from retail outlets.