Red-faced officials at Microsoft (NSDQ: MSFT) have acknowledged that the latest version of the company's Excel spreadsheet program -- an integral part of Office 2007 -- produces significant errors in a small number of cases.

The problem also affects the server-resident version of Excel -- Excel Services.

The officials said Microsoft is working on a fix for the bug, but has yet to release it.

In a blog posting Tuesday, members of Microsoft's Excel development team said the flaw occurs during calculations that would ordinarily result in, or be close to, the number 65,535. Instead, Excel produces a result of 100,000.

The Excel developers said they're not taking the problem lightly. "We take calculation in Excel very seriously and we do everything we can in order to ensure that calculation is correct for all cases," said the blog posting. Microsoft Excel is widely used in everything from basic, back office number crunching to advanced applications such as aeronautics and bridge design.

Excel team members said the glitch is the result of a floating point error -- the same sort of bug that infamously plagued Intel (NSDQ: INTC)'s Pentium chips in 1994. Put simply, a floating point error occurs when a computer -- or a human -- places the decimal point in a string of numbers in the wrong spot. It's an error common to high school math students.

Excel can store millions of floating point numbers. Twelve of those will cause the error, according to the Excel developer blog. The 16-digit numbers cannot be entered directly into Excel because the program will round them off to its maximum, 15-digit display. But the error will occur if the numbers -- six of which are between 65,534 and 65,535 and six of which are between 65,535 and 65,536 -- are the product of a calculation.

"We've come up with a fix for this issue and are in the final phases of a broad test pass," the Excel developers' blog states.

Microsoft said Excel's math isn't wrong, just the way it displays the answers: "The key here is that the issue is actually not in the calculation itself (the result of the calculation stored in Excel's memory is correct), but only in the result that is shown in the sheet," the blog post states.

While the error may seem minor, it comes at a time when Microsoft's Office franchise is under threat from free and low-cost alternatives offered by well-heeled rivals like Google and IBM. On Wednesday, IBM (NYSE: IBM) said its free Lotus Symphony suite -- which includes a spreadsheet -- garnered more than 100,000 downloads during the first week of availability.