The government department tasked with getting all goods at a cheaper price - the Office of Government Commerce (OGC) - has given up on building its proprietary computer system and been persuaded by Basda to use XML to ensure maximum interoperability.

A press release put out by OGC heralds this as a "major step in the right direction". It will "enable suppliers and public sector buyers to conduct business online more easily" and "enable easier access to the government marketplace for smaller suppliers". And if it hadn't said so, we would have agreed with it.

XML is the step-up to the Web's basic language HTML and is extremely valuable and flexible. Moving away from a system created by Whitehall to suit its own needs to an industry standard supported by business is surely the only logical step forward for an office tasked solely with getting hold of goods from industry at the best price possible.

However, the OGC is not entirely happy. Its own system would have given it the advantage and control over suppliers. This is the way Whitehall likes to play. Unfortunately for it, because the OGC does not have sufficient power over other departments to force them to chose particular IT systems, its proprietary system was a dead duck. It was therefore forced to go with the businesses' solution - giving them the upper hand, or at least, not giving Whitehall overall control.

As for the rejected system, if you look closely in the right place in a couple of months' time, under a esoterically connected name, you will probably find the government department charged with saving money has wasted about £3 million on its development.

So will this new system open up Whitehall to every small supplier in the UK and bring a new age of prosperity and joy to this nation? Not on your Nelly. Basda - standing for Business Applications Software Developers Association - is a widely recognised body but the companies "taking part in the trial" are the usual suspects - Agresso, Capita, Microsoft, Oracle, Sage and SAP.

If someone put together a list of all the over-budget, over-due and overwrought IT systems that the government has produced in the past five years, one of these companies would be behind it. Capita is particularly famous for making terrible cock-ups and Microsoft renowned of course for using its own technology to exclude competitors.

The new XML system is not a free-for-all, it will run over Basda's own eBusiness XML standard, called e-BIS-XML. This means that if Basda doesn't want you in the club, you're not in the club.

So, while it is only right that the UK government has embraced a standard protocol, all this really represents in a shift in the balance of power away from Whitehall and towards the companies that make a living providing it with goods.