Sources tell us that Nokia is developing a Linux-based replacement for its S40 phones, called Meltemi. The news was leaked, accurately, by the Wall Street Journal last week. Now we can confirm it.

The codename turned up in an internal communication we saw in April, referring to opportunities for redundant Meego staff “in the Meltemi organisation”. We inferred that was a Windows project. It isn’t.

The thinking is that a Linux-based replacement for S40 will allow developers to tap into proven development tools – and Qt.

The April memo referred to Meltemi as a platform for “rich Featurephones” and stated that development will be centered in Ulm, Germany.

Nokia acquired Trolltech with the intention of providing a unified developer platform across Symbian and Linux. By autumn 2010, it had finally licked the fruits of the acquisition into shape (there were competing teams jostling for supremacy) when the company axed its CEO, and his successor plumped for Windows as Nokia’s smartphone platform.

There’s no U-turn, however. Meltemi had been long-been touted as a richer successor to S40. Windows phones will occupy the budget smartphone segment, not Linux.

Nokia completed the transition of Symbian staff out to Accenture last week. ®