Although no exact date has yet been given, Microsoft said price cuts would be introduced in 70 countries.

In the US, the cost of the most expensive version, Vista Ultimate, will be reduced to $319 (£161) from the current retail price of $399.

Analysts said Microsoft was aiming to boost the number of customers upgrading to Vista, which was introduced in 2007.

'Greater opportunities'

The price cuts apply to the packaged versions of Vista, which account for less than 10% of its sales.

By contract, 90% of Vista sales are to PC manufacturers, where the operating system is pre-installed on their computers.

"We anticipate these changes will provide greater opportunities... to sell more stand-alone copies of Windows," said Brad Brooks, a Microsoft corporate vice president.

Microsoft says it has now sold 100 million Vista licences since it was launched.