Nokia Chief Executive Stephen Elop has revealed that Nokia has begun work on a Windows Phone, while dampening rumours that Microsoft is to buy Nokia out.

Elop is no stranger to Microsoft, given that he was poached from the computing giant, and this has fuelled speculation that Nokia is to become part of Steve Ballmer's empire.

But Elop explained that this isn't the case, and the two companies were strictly just partners.

"I'm not aware of a strategic interest that Microsoft would have in the rest of the business," Elop said to Reuters.

"To the extent that a partnership has been formed around what they're really interested in, then what would an acquisition bring other than a good year of anti-trust investigation, huge turmoil, delays?"

Work begins

Elop did reveal that Nokia is hard at work on the first Nokia Windows Phone, however, even though a deal between both companies is still months away from being finalised.

"We're right now, today, having people work on the first Windows Phone devices from Nokia," said Elop.

"That work is already under way. If this was an acquisition scenario, that wouldn't be possible,"

Elop is hoping that a Nokia Windows phone will be on sale by the end of 2011.

Via TechCrunch