Microsoft's latest advertising campaign to promote internet service MSN has fallen foul of the New York City Department of Transportation.

According to news agency Reuters, the department sent a strongly worded letter reprimanding the company for lining the city's streets and traffic signs with its MSN butterfly logo.

The New York authorities told the software giant that its acts were vandalism and instructed the company to remove them, imposing a fine of $50. It labelled the ad campaign "illegal, irresponsible and dangerous defacing of public property".

In a statement, Yusuf Mehdi, a vice president at Microsoft, apologised and said: "We made a mistake with the decals, and we take full responsibility for what happened. We are working with city officials to clean up the decals immediately."

It is not the first time Microsoft has upset municipal authorities through street art promotional tactics. The company recently fell foul of authorities in Sydney, Australia, for painting its Xbox games console logo around the city's streets.