Intel, the world's largest chip maker, has pulled out of an agreement to help provide cheap laptops to children in developing countries less than six months after signing up to the charity following "philosophical" differences with the lead organisation.

The US technology giant, which generates $5.7 billion (£2.8 billion) in annual profits, will no longer provide funding and advice to the One Laptop Per Child (OLPC) project because the group behind the not-for-profit charity asked Intel to stop promoting its own cheap computer which is also sold to children in poorer nations.

OLPC initially said its XO-1 laptop would sell for $100 but the computer retails for $188. In contrast, Intel's ClassMate PC costs $285. A spokesman for Intel said the company had pulled out of the project because OLPC had asked it to only focus on OPLC computers.

He said that while Intel "continued to support the vision of OLPC", it did not believe there could only be one provider of computers to developing countries, and it has agreements in place with local companies in developing countries to manufacture the ClassMate PC.

Intel signed up to the OLPC programme in July last year to help develop a laptop containing Intel technology as opposed to the current OLPC computers that contain chips made by Advanced Micro Devices (AMD), the world's second largest microprocessor maker.

Intel's decision to join OLPC's board last year was a surprise after a number of heated exchanges between the US chip maker and Nicholas Negroponte, founder of the Massachusetts Institute of Technology's Media Lab and head of the project.

The OPLC project was unveiled in November 2005, prompting Intel's chairman Craig Barrett to tell reporters: "Mr Negroponte has called it a $100 laptop - I think a more realistic title should be the $100 gadget."

In May 2006, Intel launched its $1billion "World Ahead" programme that included developing its ClassMate PC with other technology partners and began shipping the products in March 2007, just four months before it joined the OLPC project.

An Intel spokesman admitted that the company makes a profit from sales of its ClassMate PC but countered that the group contributes $100 million a year to charity.

In February last year, Mr Negroponte branded Intel as "silly" for its disagreements with the project, and revealed that OLPC had approached Intel first, before AMD, but said that while Intel "dismissed" the idea, AMD had "leapt" at it.

Mr Negroponte told The Oakland Tribune: "For Intel to be criticising One Laptop Per Child is a bit like Johnson & Johnson picking on the Red Cross because they use ACE bandages."

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