SEATTLE (AP) _ The British government plans to conduct much of its business online by 2005 using Microsoft technology, Microsoft Chairman Bill Gates said Tuesday.

Microsoft and the British government also are discussing marketing the software they develop to other governments, the company said in a short briefing before Gates' address to the fourth annual Microsoft Government Leaders Conference, attended by 400 officials from 80 nations.

The first phase of the project was launched Jan. 25, with limited services. The British government has made an initial investment of $21.45 million.

In his speech, Gates urged governments to set an example for businesses to get online.

The British government software, part of Microsoft's new .NET (pronounced dot-net) initiative and named ``the Government Gateway,'' includes an Internet site for a centralized registration service for government services

The first phase, now in operation, allows tax submissions for Britain's Inland Revenue, and European Union subsidy claims for the Ministry of Agriculture, Fisheries and Food.

The project is part of British Prime Minister Tony Blair's initiative to have all government transactions available online by 2005. The government hopes to simplify transactions by allowing citizens to input data once for multiple services.