Microsoft has struck a deal with the German government to protect critical IT operations in its vast public sector.

Under the agreement, Microsoft and the Federal Office for Information Security will collaborate through an intensive exchange of information in the areas of IT security, interoperability and openness, both sides said in separate statements. The agreement was signed in Berlin by Steve Ballmer and German federal minister Otto Schily.

In his discussion with Ballmer, Schily emphasised the need for Microsoft products, which play a huge role in Germany's e-government programs, to be interoperable with the offerings of other vendors and with open source software, the federal ministry said.

The German minster applauded Microsoft's decision to produce a .NET version of the OSCI (Online Services Computer Interface) protocol developed in Germany for secure legal transactions of e-government services and its support of the Computer Emergency Response Team for German medium-size enterprises, the ministry said. In the area of IT security, Germany plays a leading role in Europe, Ballmer said.

In January, Microsoft and the Federal Ministry of the Interior agreed to extend their existing licence framework agreement enabling federal, state and city governments in Germany to purchase Microsoft products at favourable prices.

The software giant has shown a high level of flexibility in its licence conditions ever since the German government struck an agreement in 2002 with IBM to supply new computers with open-source software.

Germany has also become one of the most fervent supporters of open-source software. In May last year, Munich council decided to shift to Linux desktops, leading a glut of other authorities to consider doing the same.