One security firm dubbed the bug a potential "nightmare", but Microsoft downplayed the threat by reminding users that hackers would need a second exploit to launch remote attacks.
The exploit was disclosed last week on the same day proof-of-concept code went public and lets attackers bypass the User Account Control (UAC) feature in Windows Vista and Windows 7. UAC, which was frequently criticised when Vista debuted in 2007, displays prompts that users must read and react to. It was designed to make silent malware installation impossible, or at least more difficult.
"Microsoft is aware of the public posting of details of an elevation of privilege vulnerability that may reside in the Windows kernel," said Jerry Bryant, a group manager with the Microsoft Security Response Center. "We will continue to investigate the issue and, when done, we will take appropriate action."
The bug is in the "win32k.sys" file, a part of the kernel, and exists in all versions of Windows, including XP, Vista, Server 2003, Windows 7 and Server 2008, said Sophos researcher Chet Wisniewski in a Thursday blog post.
Several security companies, including Sophos and Vupen, have confirmed the vulnerability and reported that the publicly-released attack code works on systems running Vista, Windows 7 and Server 2008.
Hackers cannot use the exploit to remotely compromise a PC, however, as it requires local access, a fact that Microsoft stressed. "Because this is a local elevation-of-privilege issue, it requires attackers to be already able to execute code on a targeted machine," said Bryant.
"On its own, this bug does not allow remote code execution, but does enable non-administrator accounts to execute code as if they were an administrator," added Wisniewski.
Although many Windows XP users, especially consumers and those in very small businesses, run the OS via administrator accounts, Microsoft added UAC to Vista and later operating systems as one way to limit user privileges, and thus malware's access to the PC.
Attackers would have to combine the exploit with other malicious code that takes advantage of another vulnerability on the machine - not necessarily one in Windows, but in any commonly-installed application, such as Adobe Reader, for example - to hijack a PC and bypass UAC.
"This exploit allows malware that has already been dropped on the system to bypass [UAC] and get the full control of the system," said Prevx researcher Marco Giuliani in an entry on that security company's blog.
Prevx reported the vulnerability to Microsoft earlier in the week.
"This could potentially become a nightmare [and] we expect to see this exploit being actively used very soon," said Giuliani on Tuesday. "It's an opportunity that malware writers surely won't miss."
UAC's effectiveness has been called into question before. Last year, Microsoft modified Windows 7's UAC after a pair of bloggers reported that it could be easily disabled by attackers.
Microsoft's Bryant did not say when the company would patch the bug. The company's next regularly-scheduled patch day is Tuesday, 14 December.
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