Free-X had been trying to negotiate with Microsoft, and was requesting the release of a "signed" Linux boot loader, which would allow Xbox owners to run the open source operating system without any hardware modifications or the exploitation of the console. Microsoft would not negotiate, group members have told ZDNet Australia.

Group representatives reject claims they are encouraging piracy and accuse the software company of failing to protect its game developers' intellectual property. A signed boot loader won't allow the console to run pirated games, whereas the exploit they have developed will. Free-X say piracy is not something they wish to encourage.

"If Microsoft had agreed to sign Linux then it would have been possible... to prevent the illegal use of pirated software," the statement said. "It is a shame that Microsoft appears to not share our concerns about protecting the intellectual rights of those who develop software for their console".

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