Microsoft is to fund a remake of the cult BBC sci-fi series Blake's 7 for its Xbox Live service.

Blake's 7, which was dubbed "The Dirty Dozen in space", was devised by Terry Nation, the creator of Doctor Who's Daleks, and ran for four series on BBC1 from 1978 to 1981 and became an international hit that has maintained a loyal following.

Microsoft, which has agreed to finance a remake according to the Financial Times, replaces NBC Universal's Syfy which announced a deal to revitalise the show last year.

Syfy, which successfully revived 1970s cult series Battlestar Galactica in 2004, had been considering a 13-episode series.

For Microsoft, the deal marks its latest high profile move to invest in original TV programming ahead of the launch of the new Xbox One console – it already has a deal with Steven Spielberg's Amblin TV to make a series based on its hit game Halo.

"We do not comment on rumour or speculation," said a spokesman for Microsoft.

Microsoft's big budget programming strategy is following in the footsteps of Amazon and Netflix, the latter spent $100m on a remake of the BBC's House of Cards, starring Kevin Spacey.

It is not clear how true to the original any Blake's 7 remake will be, given that the story of the interstellar renegades and their fight against the evil Federation ended in a bloodbath. However Microsoft, like Syfy, has hired Goldeneye director Martin Campbell to direct the pilot to lend the project heavyweight credibility.

Blake's 7 has been revived as a series of audio dramas, some of which have been broadcast by the BBC, and books.

The Microsoft series will be produced by Georgeville TV, the studio founded by Motion Picture Capital, the London-based film and TV company backed by Reliance.

Reliance is an Indian conglomerate controlled by Anil Ambani.

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