Microsoft has announced that the web version of Office 2010 will be free - a move will put Google Apps in the gun as the tussle between the two software giants intensifies.

Due in the first half of next year, the web-based version of Microsoft Office 2010 will be available at no cost for the 400 million members of Microsoft’s freebie Live services (which include Hotmail).

Already demo’d some months ago, the online version of Office 2010 (codenamed Office 14) lets you not just view Word, Excel and PowerPoint files in a web browser, but also edit and save changes.