MICROSOFT reportedly threatened to move its research facilities out of the UK if the government went ahead with plans to promote open source standards.
The Conservative Party announced plans last year, which have since come into force, to move government departments to open source software in a bid to save money.
Cabinet Officer Francis Maude outlined plans at the time to shift the UK to the .odf Open Document Format and away from Microsoft's proprietary .doc and .docx formats.
Maude said: "The software we use in government is still supplied by just a few large companies. A tiny oligopoly dominates the marketplace.
"Microsoft phoned Conservative MPs with Microsoft R&D facilities in their constituencies and said we will close them down in your constituencies if this goes through," Hilton said. "We just resisted. You have to be brave."