The NHS has signed a software licensing deal with Microsoft that will provide for the development of a specifically designed user interface, while also providing substantial cost savings for the multi-billion pound project, it was announced today.

The licensing agreement between the NHS and the software company allows health service and Department of Health workers to use Microsoft's desktop and mobile computing software on up to 900,000 computers, up from 500,000 in its previous agreement. Financial details of the agreement were not disclosed.

The NHS National Programme for IT (NPfIT), which is overseeing the upgrade of the NHS and Department of Health's IT infrastructure, claims the new software licensing agreement will save the UK government £112m over the next three years and more than £330m over the nine-year life of the contract. The contract provides for renegotiation every three years, should costs reduce or circumstances change within that time period.

NPfIT director general Richard Granger said in the statement that Microsoft's commitment to £40m of research and development under the agreement will result in guidelines and toolkits allowing for independent software vendors to deliver an NHS-specific user interface.

The NHS/Microsoft announcement comes a week after the UK government's central procurement agency, the Office of Government Commerce, published a report citing the advantages of open source software on both the server side and on the desktop.

The NHS and Department of Health said that despite the agreement with Microsoft, the option to use open-source software in the future remains and continues to be evaluated.

Officials at the NHS declined to comment beyond the statement and representatives for Microsoft were not immediately available to comment.