The next version of Microsoft MSN internet access software is due for release later this year and for some users it will sport a significant new feature: a price tag.

The company is readying the release of MSN 8.0, its password-protected internet software that allows users to access MSN email accounts, news and entertainment content and browse the web. Along with its internet access service, the software competes against that of AOL, which is expected to release its new internet software also at the end of the year.

MSN 8.0 will be available for free to customers of Microsoft's MSN Internet Service, which is available for dialup and broadband connections, the company said. However, to use the software with internet access from another service provider customers will have to pay a fee.

"We think this scenario will make up a significant percentage of the people who use [the software]," said Parul Shah, an MSN product manager.

"There's a lot of value that we see customers finding in this product," Shah said. "We think [customers] are willing to pay for the look and feel of a product."

Microsoft would not yet disclose pricing for MSN 8.0, but said it will be sold on a subscription basis. It is scheduled for release in the fourth quarter of 2002. MSN 7.0 is currently available for free from Microsoft's website.

Version 8.0 will include parental control features that allow users to block access to certain websites. Parents will also have control over the email addresses their kids use to send and receive messages. Additionally, weekly status reports can be sent detailing which websites their children visit and how long they spend at each site.

The software also features a customisable desktop, and a feature called a 'dashboard' where users can display instant messenger buddy lists, news, weather, stock quotes and digital photos.

Microsoft's 'natural language' facility allows users to type a word or phrase into the address panel in the MSN web browser and receive a list of online destinations that relate to the phrase. An entry of 'London', for example, might bring up links to maps or guides of the city. Typing an email address into the address panel will open a window in the MSN email client where users can compose a message.

The email client in the software is also due an overhaul so that it more closely mirrors Microsoft Outlook, the company's desktop software for managing email.

AOL currently has around 34 million subscribers compared to MSN's eight million.