Microsoft has nobbled Google’s Chrome browser by identifying it as Malware.SmartHouse first noticed this last week when we had trouble with our Chrome browser. We then found that all our favourites and the browser had been removed.

After reloading the software we had problems with the prior browser settings and our bookmarks.

Now it emerges that Microsoft’s Forefront Endpoint Protection wrongly identified Google Chrome as malware in its “Win32/Zbot” error.

Microsoft said in an emailed statement that the Chrome removals took place due to a mistake on the part of Microsoft Security Essentials software for Windows.

The LA Times reported that Microsoft Security Essentials and also Microsoft’s Forefront Endpoint Protection software can remove Google Chrome as a malware threat.

This matches up with reports from ZDnet which broke news of the Chrome problems on Friday morning in the US. SmartHouse started to have problems on Friday Australian EST.

The software errors wrongly spot Chrome as malware to be removed from PCs. For affected users, simply trying to reinstall Chrome doesn’t solve the problem. Instead, Microsoft’s software removes the browser again.

The Windows-maker, however, said that an update to Microsoft Security Essentials’ software has been pushed out to the web and it’s working on making everything well again.

A statement issued by Microsoft said:

“On September 30th, 2011, an incorrect detection for PWS:Win32/Zbot was identified and as a result, Google Chrome was inadvertently blocked and in some cases removed from customers PCs. We worked quickly to provide an updated signature (1.113.672.0) at 9:57am PDT to fix this issue.  Affected customers should manually update Microsoft Security Essentials (MSE) with the latest signatures. To do this, simply launch MSE, go to the update tab and click the Update button, and then reinstall Google Chrome. We apologise for the inconvenience this may have caused our customers.”

Google, for its part, published a blog post on the matter, explaining to Chrome users in a series of steps how to reinstall the browser after Microsoft’s mistake.