Microsoft could release a new handheld computer, which will compete with Apple's iPod, Sony's PSP and BlackBerry's mobile e-mail device, as soon as this week.

The software giant has admitted that an image of a new handheld console that was leaked on a film production website is a prototype of a device it has developed with a set of partners.

As Times Online reported yesterday, bloggers had already identified a cryptic web site - The Origami Project - as being created by the world's largest software developer to hype the gadget ahead of its official launch.

The site heralds a product that "can change your life," but offers no concrete details. It promises that consumers can "learn more" on Thursday.

According to the Gamasutra site, "rather than an explicit game-only device, the Origami Project concept seems similar to existing tablet PCs, with a large touch screen display noticeably bigger than either the iPod or PSP.".

The Wall Street Journal agreed with those reports, citing a person familiar with Microsoft workers on the project. The company later confirmed to Reuters: "Origami is a concept we’ve been working on with partners".

It added: "please know that the video seen on Digital Kitchen’s Web site is a year old and represents our initial exploration into this form factor, including possible uses and scenarios."

Microsoft has not revealed the identity of its partners on the project.

The video showed young people using the "Origami" device to sketch pictures, use a map with global positioning satellite technology, listen to digital music and play a video game.

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