The software giant says people have been deliberately removing COA labels from OEM’s PCs or copying COA labels for re-sale to customers and distributors.

Disabling internet activation is the latest stage in a long-running campaign designed to stop illegal copying and use of its software. Previous efforts included use of special holograms on CD versions of Windows that Microsoft said would are difficult to forge, to prove the authenticity of the software contained on the discs.

However, it seems, people not just the forgers – have a penchant for copies of Windows that are either free or available below official prices, making Microsoft a prime target for forgery and illegal use, especially in emerging markets.

According to the Business Software Alliance (BSA) China was responsible for 92% of the world’s illegal software during 2003, while the market for illegal software, itself, was worth $29bn.

As a consequence of this rising tide, Microsoft will, from today, require customers who purchase machines from 20 of the industry’s leading manufacturers contact Microsoft directly, via the phone, to activate their new copies of Windows XP.

Those who attempt to activate Windows XP using the COA product key will be denied access, with a box appearing on the screen advising the customer to call Microsoft.

A spokesperson for Microsoft insisted the change would cause minimal disruption to consumers. Most large, direct OEMs used System Locked Pre-installation (SPL), which means end users are not typically required to activate, the spokesperson told ComputerWire.

She added the move was intended to thwart criminals, noting there was no legitimate reason to sell or purchase COA labels on an individual basis. If a system builder buys a standalone COA, it was most likely stolen or illegally distributed, the spokesperson said.