Under the agreement, Microsoft will offer technical assistance to the police unit that investigates high-tech crimes.

At a symposium on Internet security, Microsoft chairman Bill Gates said partnership with the government was the key to prevent online fraud.

"For example, the police, they need to understand the software technology, what the bad guys might be doing using that," he said, adding there was "a need for a very strong dialogue" between high-tech firms and government.

The accord with the Japanese police is a "milestone" in cyberspace crime prevention, he said.

Gates said education of users was also important, noting that use of the latest technology alone could not provide a complete solution.

"We need to have users to have far more awareness about giving out confidential information, giving out their credit card (numbers), downloading software that may not be what it appears to be and how to use their system in a way that keeps them safe," he said.

Microsoft would not unveil details of the agreement. A company official said no money had been involved.

In 2004, Japan saw 2,081 cyberspace crimes, up 13 percent, police data showed. Some 91 percent of them were fraudulent cases involving computer networking systems.

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