Mozilla, the non-profit software group that is taking market share from Microsoft, has unveiled plans to release a radically revamped version of its Firefox internet browser as early as next year.

An early test version of the new version of the browser, Firefox 3.0, was unveiled this week to developers under the codename Gran Paradiso. Its release follows a report showing that Firefox accounts for 20 per cent of the browser market across Europe and as much as 40 per cent in some countries.

Mozilla uses an army of volunteers to build software that it then provides free over the web. It hopes that Firefox 3.0 will build on the success of Firefox 2.0, which Mozilla says was downloaded two million times within 24 hours of its release in October and continues to be downloaded by more than 500,000 users a day.

Mozilla's success, boosted by support from technology groups such as Google, has dented Microsoft's domination of the browser market through its Internet Explorer (IE). According to XiTi Monitor, the research group, Firefox accounts for 22 per cent of the browser market in Britain. In Germany, Europe's largest economy, it is used by a third of all internet users.

Microsoft released its first major update of its browser, Internet Exolorer 7, last month. XiTi's figures suggest that while use of IE7 has tripled, Firefox 2.0 usage has risen 14-fold in the same time.

To read the XiTi report click here.

Firefox 3.0 has been under development for a year and will constitute a far bigger overhaul to the Mozilla browser than the release of Firefox 2.0, Mozilla has said. Large changes are expected in the code that "renders" websites - makes them appear on screen - an improvement that Mozilla promises will make the new browser far faster.

The group has also suggested that Firefox 3.0 will include a new system for storing online bookmarks and that the Mac version will "look more native" on Apple computers.

Tristan Nitot, who heads Mozilla's operations in Europe, said: "Firefox 2 was a very polished piece of software. But perhaps it lacked a 'wow' factor, because it looked very similar to [its predecessor, Firefox 1.5]."

He added that Firefox 2.0 features, such as anti-phishing security measures and online spellchecking had been "hidden away".

In line with its forebears, Firefox 3.0 will also trade heavily on its claim to be more secure than Microsoft’s browser. Firefox 2.0 included new protections against "phishing" – or internet identity theft by cybercriminals – through a tool that will tell users when they meet websites that are suspected forgeries, designed to capture personal details.

Mozilla was formed from the remnants of Netscape, the browser company that lost its dominant market position to Internet Explorer in the 1990s. Its commercial success has forced the group to divide into two parts, the non-profit Mozilla Foundation and a commercial arm, the Mozilla Corp, to operate under US laws controlling charities.

To have your say on the battle between Internet Explorer and Firefox, click here.

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