INTEL, the maker of microchips, has abandoned the charitable joint venture that aimed to sell cheap laptop computers to the world's poorest children.

The company, with a major operation in Swindon which employs 850 people, withdrew from the scheme after a public row with its founder.

But the company will still continue with its global programme to educate young people in the third world.

Intel joined the project last summer and has been at loggerheads with the organisation, called One Laptop Per Child (OLPC), ever since.

The row had been with founder Nicholas Negro-ponte, a professor at Massachusetts Institute of Technology in the USA, who wanted to supply cheap laptops.

He proposed to find a means of manufacturing laptops for £50 each to help narrow the technology divide between the rich and developing nations and wanted to see 150m schoolchildren receive laptops by the end of this year.

The laptop project has encountered cost problems, with OLPC failing to hit cost targets. Its computers sell for about £188 each.

Intel said that it had withdrawn from the project after Mr Negroponte told the company that it must stop trying to compete by selling its own cheap laptop, the Classmate, to the same developing countries as OLPC.

Intel is understood to have insisted to the OLPC project that its own chips be used for the laptops.

It is also understood Intel proposed chips that would be both more expensive and consume more power than AMD chips, a rival company.

Relations deteriorated between the two sides after Intel was believed to have been marketing its own Classmate laptop by disparaging the OLPC computer, called the XO. It is thought that Intel sought to undermine the XO in countries that had already decided to be partners with the OLPC project, such as Uruguay and Peru.

In response, Intel has argued that ending sales of Classmate to such countries would harm commercial relationships with its suppliers.

Chuck Mulloy, a spokes-man for Intel, was reported to have said that it had reached a philosophical impasse with OLPC and could not accommodate Mr Negroponte's call to stop selling the Classmate in the same markets.

OLPC is also understood to believe that Intel has breached an agreement for co-operation on software.

A source close to OLPC accused Intel of not contributing any engineering effort or even a single line of code to the XO.

Chris Hogg, head of marketing with Intel (UK), said it was part of the company's ethos to help and educate young people around the world with new technology.

The company would continue with its own programme regardlessly, he added.