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Yesterday, a routine anti-virus update from web security firm McAfee confused a valid Windows file with a virus and disrupted millions of computers around the world – including those in Australia. Among those hit were Coles and Intel.

Australian supermarket chain, Coles, was among the hardest hit as the bug hit its point-of-sale terminals, forcing many stores to close.

Around 1100 terminals, or 10 percent of Coles’ total around the nation, were affected, Coles spokesman, Jim Cooper said.

Commonwealth Bank and telco Virgin Mobile, an Optus subsidiary, were also affected.

A CBA spokesperson said no ATMs had been affected by the outage, but many staff members had not been able to log in to their PCs, forcing a close of some business activities.

In the US, universities, hospitals and businesses across the country were said to have been affected.

The Internet Storm Centre, which monitors problems on the web, said it received reports of “networks with thousands of down machines and organisations which had to shut down for business until this is fixed.”

Even the HQ of No. 1 chipmaker, Intel, was hit. The software glitch “pretty much took Intel down,” said analyst Rob Enderle of Enderle Group in Silicon Valley, who was visiting the chipmaker’s HQ when the crisis hit.

He said laptops began crashing around him. “Much of Intel was actually taken out,” Enderle told the AFP news service. “I imagine most companies running Intel and McAfee were literally taken out.”

The University of Michigan’s Medical School reported that 8000 of its 25,000 computers crashed. In Lexington, Kentucky, police resorted to handwriting reports and turned off their patrol car terminals as a precaution.

Some jails cancelled visits, and Rhode Island hospitals turned away non-trauma patients at emergency rooms and postponed some elective surgeries.

McAfee apologised to customers for the problem, which seemed to affect primarily Windows XP computers running Microsoft’s Service Pack 3. Experts said McAfee’s application had incorrectly confused a legitimate operating system component known as svchost.ex with a virus.

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