Intel has pulled out of the One Laptop Per Child Project's board of directors.
The move came after Intel refused a request to abandon its Classmate PC programme, according to a source familiar with the situation.
Intel's departure from OLPC's board means that an effort to build a version of the project's XO laptop based on an Intel processor is over, the source said.
Intel's Classmate PC is a low-cost laptop designed for students in developing countries and competes against OLPC's XO laptop, which is based on a microprocessor from Advanced Micro Devices (AMD). Intel and OLPC agreed in July to work together on the development of technology for low-cost laptops and to stop disparaging each other's laptop offerings.
As part of that agreement, Intel got a seat on OLPC's board of directors and the two sides began to discuss building a version of the XO based on an Intel processor. At the same time, OLPC also explored the possibility of using an Arm processor from Marvell in yet another version of the XO.
But during discussions in the months following the July deal, OLPC founder Nicholas Negroponte insisted that Intel abandon the Classmate PC effort in favour of throwing its support behind OLPC's XO device, the source said. But the Classmate PC is undergoing tests in several countries and Intel was not prepared to walk away from those efforts, according to the source.
Intel spokesman Nick Jacobs confirmed that the company and OLPC had parted ways, but declined to comment further on the matter.
In an e-mail, OLPC President Walter Bender said other factors also contributed to the breakdown in the relationship with Intel, including "a complete lack of cooperation by Intel on software, learning, etc."
"Intel continues to treat our mission simply as another market," Bender wrote.
OLPC has struggled to win orders for the XO laptop. A rising price tag -- now close to US$200 (£100), instead of $100 as originally planned -- hasn't helped the group make inroads with cash-strapped governments in developing countries.