Researchers have identified a fresh security flaw in Microsoft’s IE (Internet Explorer) web browser and Outlook email client, which can leave systems open to malicious code inserted in emails or web pages, according to network security consultancy Pivx Solutions.

The hole is created by what is known as a cross-domain scripting flaw. In this case it means that HTML version 4 objects embedded in web pages and emails can include code that allows an attacker to remotely access machines, read files and documents and execute programs on the computer, Pivx said.

Pivx described the vulnerability as "extremely high risk", as it allows the arbitrary execution of programs, unprivileged reading of files, and stealing of server cookies.

The flaw occurs because of the object element used to embed external objects inside an HTML 4 page. Such objects can be the WebBrowser control and other ActiveX controls, images, applets and more. The object property of embedded WebBrowser controls is not subject to the cross-domain security checks that embedded HTML documents ordinarily go through, and as such it is possible to escape any sandboxing (opening suspect documents and programs in a restricted environment) and security zone restrictions, Pivx said.

In testing, Pivx has demonstrated the flaw in IE 5.5 running on both Windows 98 and Windows NT and on IE 6.0 running on Windows 2000. The flaw also affects the Outlook and Outlook Express email clients.

A quick workaround involves disabling ActiveX, or setting "Script ActiveX controls marked safe for scripting" to Prompt or Disable, according to Pivx’s statement.

The flaw was discovered last month and Microsoft was informed, Pivx said.