Rumour: Milo and Kate Kinect game canned

Rumour has it that Milo and Kate for Microsoft's Kinect platform, the interactive child simulator developed by Lionhead's Peter Molyneux, has been cancelled.

The claims come from "a source claiming to be close to the situation," who told games site Eurogamer that work on the title officially stopped yesterday, with nineteen contractors from the project let go with immediate effect.

The team that was working on Milo and Kate, minus the unfortunate contractors, has now been told to focus on a tie-in Fable title for Kinect to capitalise on the launch of Lionhead's Fable 3.

The new Fable Kinect game is thought to utilise technology from the Milo and Kate project, but other details are as yet unavailable.

Responding to the rumours, a spokesman for the company stated only that "Microsoft does not comment on rumour or speculation," which is quite some way from being an outright denial of the claims.

The move comes a mere month after Molyneux told an interviewer who asked whether Milo and Kate would ever be available for purchase that he "wouldn't be working on it if I didn't hope that was true," but it confirms comments made by Microsoft spokesman Aaron Greenberg back in June that "it's not a game we're planning to bring to market."

Sadly, it looks like Greenberg never told Molyneux of his company's plans - or lack thereof - for the Milo project.