The NHS is in discussion with Microsoft about the possibility of a health service-specific version of its Windows and Office products.

And the £530m NHS N3 broadband infrastructure contract has been signed with BT, concluding the procurement phase of the £2.3bn National Programme.

Following the conclusion of an NHS-wide deal with Oracle, negotiations are continuing with Microsoft for a similar arrangement. Discussions with Sun Microsystems about its open source desktop also started in December.

"We are meeting with Microsoft as a supplier of IT services and products to the NHS, but these discussions are not exclusive to Microsoft," said a spokesman for the National Programme.

"We are in negotiations with other suppliers designed to identify the best value IT products and services for the future of the NHS."

The seven-year N3 contract will extend the existing health service network to another 8,000 sites and boost bandwidth to up to 1Mbps for GPs, 100Mbps for acute hospitals and 10Mbps for primary care trusts - sufficient to support electronic transfer of video and X-ray images.

Implementation will start in April and the new capacity will be fully rolled out in two years.

BT's role is as integrator rather than physical network provider, NHS IT director general Richard Granger told vnunet.com's sister title Computing.

"This is not an old-fashioned network procurement where the provider supplies and manages the physical layout," he said.

"BT will manage procurement of capacity at best market rate and much shorter cycle times rather than buying hard-wired into a closed private network for many years."

N3 is the first major purchase to go through the Regional Aggregation Boards (RABs) created to pull together public sector demand for broadband to stimulate commercial infrastructure roll out.

"BT will default to the procurement of physical capacity from RABs as part of the Broadband Britain initiative," said Granger.

"But if the boards fail to supply or are at too high a price, BT will be obliged to procure connectivity to standards we have set out under N3 contract through alternative routes."