The service, known as GPay, would use text messages to pay for everything from goods in a vending machine to products in regular offline retailers.

A spokesman for Google said that the company filed a lot of patents but not all of them led to products.

Speculation about a possible GPhone emerged in December 2004, when Google vice president Urs Hoelzle spoke of mobile growth being stalled because of too much fragmentation.

The rumours have since been fuelled by various acquisitions Google has made in mobile software.

Some commentators say that Google envisions itself as an operator of an ad-supported free mobile service. But most recently the speculation has focused on the company launching an operating system to work on mobile phones from a number of operators.

Om Malik, author of the technology blog GigaOm, said: "Initially there was one prototype, but over the past few months Google has the mobile operating system running on three to five devices, most of them likely made by HTC, a mobile phone maker." Watch