Intel's low-cost laptop initiative got a boost Wednesday from Portugal's government, which is pledging to provide elementary school students with 500,000 computers based on the chipmaker's Classmate PC design.

The announcement brings Intel's rivalry with the One Laptop Per Child organization into the spotlight once again.

In May, the nonprofit OLPC group said its green-and-white XO laptop computers would work with Microsoft's Windows in addition to a Linux-based operating system.

In a single deal for half a million PCs, Intel nearly matched OLPC's total orders to date - about 622,000 laptops - calling into question whether OLPC's adoption of Windows has made much difference.

The Magellan Initiative ("Iniciativa Magalhaes"), a new program under Portugal's education technology plan, was launched on Wednesday by Portuguese Prime Minister Jose Socrates and Intel Chairman Craig Barrett.

According to the plan, Intel will provide technology advice and support to the Portuguese government in managing, promoting and implementing Magellan initiatives. They are also planning to create a "Competence Centre" in Portugal to expand the use of mobile PCs and Internet access and use that knowledge to replicate pilot projects in other countries.

Parents of young schoolchildren will be able to choose between computers running Windows operating system and ones with an open-source Linux operating system, and that the government will distribute the machines to Portugal's elementary school students over the course of the 2008-2009 school year.

Classmate PCs are based on Intel's design and include its processors, but they are built by other manufacturers and sold under a variety of brand names. The first generation went on sale in March 2007; a heftier version with a faster processor and a bigger screen hit the market in April 2008.

The relationship between Intel and OLPC, whose XO machine uses microprocessors made by Intel competitor AMD, has been notoriously rocky. The two declared a truce last summer, but in January relations turned frosty again when Intel pulled out from OLPC's board of directors.

No slowdown in World PC market

In related news, Intel Chairman Craig Barrett said on Wednesday that he expects no slowdown in global demand for personal computers despite economic problems in the United States and in other countries.