Intel is bringing its low cost laptops which were designed for poor children to the market in the US and Europe.

The second generation of the Classmate PC will retail for between $250 and $350, early reports suggest, and will run on the Windows operating system.

Classmate PC's were originally targeted at emerging markets and Intel plans to hike up production levels in 2008.

Manufacturers in India, Mexico and Indonesia have begun selling Classmate PC's but figures suggest only fewer than 100,000 have been sold to date.

Rob Enderle, analyst with the Enderle Group, told Reuters: "Particularly in a recession year, quality low-cost products are going to move well."

Taiwan's Asustek Computer's Eee PC has been the best selling low-cost laptop on the market, and the machine has to date run on the Linux operating system.

However earlier this month it announced a new Eee PC pre-installed with Microsoft Windows XP.

Mr Ebderle said that he expects that by Christmas "consumers will be able to get a pretty decent laptop for less than $600 and perhaps for less than $500".