Zanzibar, to be launched in March 2005, will attempt to better show who is selling in the market, improve contract compliance and aim to save £41 per fully automated transaction.

Amabel Grant, project manager of Zanzibar, told SM that companies would be invited to tender with their own suggestions for the marketplace's specifications and processes.

"We will see what companies competing for contracts have to offer and we'll decide on the appropriate technology," she said.

The OGC would not disclose the total budget for the project.

But some critics believe that the project will only encourage a price crash and neglect value.

Wally Johnson, an e-marketplace and benchmarking consultant, told SM that Zanzibar was an example of "centralisation gone wrong". He added: "The OGC appears to have no real business model and the projected savings are speculative.

"If everyone's prices become transparent, it will lead to a dogfight over who can offer the lower prices and no-one will consider value for money."

However, Grant was adamant that value for money would remain the primary focus of the project.

"We want value for money and this is judged on levels of quality and service as well as a competitive price," she said.