Microsoft will provide software for schools for another three years, after extending its deal with Becta, despite the two organisations failing to reach an agreement over licensing terms.

Becta complained to the Office of Fair Trading (OFT) in October, saying interoperability was impeded in the software, excluding other applications from school IT use .

A spokesman for Microsoft said: "We have been in regular dialogue with Becta and are fully supportive of the new 3 year Memorandum of Understanding (MOU). Whilst only a small proportion of school's ICT spend is on software, the MoU makes a valuable contribution to education costs for schools who choose Microsoft software."

Becta was not available for comment.