The STE, as the machine will be called, will challenge the Amiga head on, matching it in specification and undercutting it in price. Senior sources at Atari claim the new micro will offer 256 colours on screen, four-channel stereo sound and hardware scrolling.

The lack of these features has always been the main criticism of the ST. The STE will be fully compatible with current ST software and will be bundled with the present Power Pack of games software. The STE at £399 with the Power Pack will put Atari in an extremely powerful position in the Christmas market.