Microsoft faces a serious threat to its UK public sector monopoly from plans by local authorities to increase their use of open source software, a survey commissioned by the FT has found.

More than 60 per cent said they intended to increase their use of open source software, which is free or much cheaper than Microsoft's products. More than three-quarters using it plan to expand their use over the next three years, while two out of five who do not yet use it plan to do so.