An Oxford college is expected to establish a technology project in a joint venture with Californian-based computer chip giant Intel.

St Catherine's College is understood to be holding talks with the firm, which makes 80 per cent of computer processors, and the deal could be finalised by the autumn.

Intel has experienced recent problems as a result of falling demand and experts believe the company is keen to expand its business into other areas.

Both parties are reluctant to comment, but a spokesman for Intel said: "We will be launching an education initiative in which Oxford University will be playing a part and senior figures from the US will be involved."

Labour's Peter Mandelson is an honorary fellow of St Catherine's College and the master, Lord Plant, is a leading Labour peer.

The party's Derek Wyatt, an MP who has called for more computers in society and more access to the Internet, is also said to be involved.

Experts say Intel wants to encourage the need for powerful computers through a range of development projects, which will boost demand for its main business in computer chips.

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