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The company said that online sellers are running schemes including the sale of the entirely fictional "Blue Edition" Windows XP software; a counterfeit version of the operating system. Using the label "Blue Edition, sellers have been fooling unsuspecting consumers into purchasing illicit software burned onto a CD, the company claims.

It has initiated seven civil cases against internet auctioneers in the UK for trademark infringement, accusing them of selling high quality counterfeit Windows, Office 2007 and 2003 software.

Microsoft reckons that between them, these sellers may have sold over 900

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individual counterfeits, worth an estimated £69,000.

"Dishonest auctioneers are too often using these online auction sites to sell counterfeit and illegal copies of Microsoft software, taking advantage of unsuspecting customers around the world," said David Finn, from Microsoft's worldwide anti-piracy and anti-counterfeiting arm.

"These dealers are peddling bogus products that can put customers and their personal information at serious risk."

eBay said it welcomes the legal action against some of its sellers who are suspected of selling counterfeit software. The online auctioneer said that counterfeits are bad for everyone and the company's efforts to fight them are "stronger than ever".

'Because of eBay's extensive anti-counterfeiting efforts, customer protection programs and the partnerships with companies such as Microsoft, buyers can be confident that eBay is one of the safest places to shop online for authentic goods," said Mary Huser, eBay's vice-president of intellectual property.

Microsoft identified the sellers by making test purchases, although the company said its actions were made in reaction to complaints raised by concerned customers.