Image copyright Getty Images Image caption Microsoft started an investigation after details of its new Windows 8 operating system were released early

Microsoft is caught up in a privacy storm after it admitted it read the Hotmail inbox of a blogger while pursuing a software leak investigation.

On Thursday, the firm acknowledged it read the anonymous blogger's emails in order to identify an employee it suspected of leaking information.

Microsoft owns Hotmail, a free email service now called Outlook.com.

John Frank, deputy general counsel for Microsoft, said it took "extraordinary actions in this case".

While the search was technically legal, he added Microsoft would consult outside counsel in the future.

Legal actions

Microsoft's actions came to light this week as part of a legal case by US prosecutors against an ex-Microsoft employee, Alex Kibalko, who was a Russian native based in the company's Lebanon office.

In 2012, Microsoft had been alerted to the fact that the blogger, whose identity was kept anonymous in the court papers, had been given some stolen lines of code from the not-yet-released Windows 8 operating system.

The blogger then posted screenshots of the unreleased Windows operating system to his blog.

To figure out the source of the leak, Microsoft began an investigation and, as part of that search, looked into the blogger's accounts to find out the name of the employee.

The search was legal because it fell within Microsoft's terms of service which state that the company can access information in accounts that are stored on its "Communication Services", which includes email, chat areas, forums, and other communication facilities.

The terms of service add: "Microsoft reserves the right to review materials posted to the Communication Services and to remove any materials in its sole discretion."

Nonetheless, revelations of the search have led to renewed focus on the privacy violations of technology firms.

It has also left Microsoft in a difficult position, as the firm has often criticised rival Google for its automatic scanning of users' emails in order to serve them with advertising.