The chip is a new version of the Japanese technology companys RFID u-chip (radio frequency identification chip), which was introduced in 2001.

Measuring just 0.4mm x 0.4mm in size, the new version features an internal antenna, enabling it to transmit its ID number to a reading device.

The new u-chip can be easily embedded into banknotes and document to ensure their authenticity.

The European Central Bank is also said to be discussing a project to work with Hitachi on embedding Euro banknotes with RFID u-chips, in a bid to combat counterfeiters and money launderers.

A spokesman for Hitachi said the project was not being undertaken at present, as the chips firstly need to be priced at a reasonable level to make them cost-effective.

The original u-chip, which is the same size as the new version, originally required the use of an external antenna, to allow external devices to read its internal identification number.

The 128 bit ID number is stored or burned into the chips read only memory (ROM) at the time of manufacture, meaning it is impossible to change or rewrite the number.

One of the first applications of use of the new u-chip will be at Expo 2005 Aichi Japan, where it will be embedded into visitor tickets for the show, which opens on 25 March 2005.

Story by Andy Scott