MICROSOFT is to launch the ultimate computer game, banishing handheld controls and allowing players’ gestures to dictate the action on screen.

The new entertainment system, which uses 3-D camera technology, is aimed at challenging the dominance of the Nintendo Wii, which has transformed gaming from a predominantly male pursuit to an activity families can take part in.

The Microsoft Xbox 360 system will allow users to kick a virtual football, drive a car or practise dance moves with a computer-generated partner - simply by monitoring an individual’s movements.

While other gaming systems, such as Sony’s EyeToy, are able to detect players’ movements in two dimensions, the Microsoft camera is the first to be able to sense 3-D motion. It is based on technology developed by 3DV Systems, an Israeli company recently acquired by Microsoft. It uses infrared light to detect real-life gestures and the players’ distance from the camera. This information is then converted into a related movement on screen.

A player, for example, will be able to fly a fighter jet by pretending to clasp a joystick, or shoot a gun by squeezing an imaginary trigger.

Industry sources believe Microsoft could unveil the new technology as early as next month at the E3 video game conference in Los Angeles.

It is likely to become a big rival to the Wii, which allows users to simulate playing a guitar or swinging a racket by holding a motion-sensitive wand.

A source close to the Microsoft project said: “By taking away the controls altogether the game becomes so easy to operate that even your grandmother can master it.”

The company refused to comment.