Googlers testing out the new Google phone have forced Google's mobile arm to confirm the possible existence of the much rumoured handset.

"At Google, we are constantly experimenting with new products and technologies, and often ask employees to test these products for quick feedback and suggestions for improvements",  Mario Queiroz, vice president, Product Management said in a blog post posted on Saturday morning. 

"We recently came up with the concept of a mobile lab, which is a device that combines innovative hardware from a partner with software that runs on Android to experiment with new mobile features and capabilities, and we shared this device with Google employees across the globe".

The process, which Google refers to as "dogfooding", means that Googlers get to try out the latest kit, which they have tested over the weekend: 

"Stuck in mass of traffic leaving work post last all hands of 2009. ZOMG we had fireworks and we all got the new Google phone. It's beautiful." wrote one Google program manager.

While another wrote: "A friend from Google showed me the new Android 2.1 phone from HTC coming out in Jan. A sexy beast. Like an iPhone on beautifying steroids".

Details are thin on the ground, although the rumoured device, which could just be a developer handset announced on the 2 December, is expected to be made by HTC, albeit unbranded, and come with Qualcomm's Snapdragon processor, an OLED screen and running Android 2.1. 

Although no official word has come from Google on the latest version of the Android mobile phone OS, Verizon has already confirmed its existence saying that the Droid Eris (the Verizon branded HTC Hero) would possibly be getting the update in the first half of 2010.

The news comes as Google continues to step up the ante in the phone arena for its android-powered devices with a number of software applications designed specifically for the android platform.  

Earlier in the week the company launched Google goggles, an application that allowed you to search by taking a picture of something or merely pointing your camera's phone towards it.

While earlier in the month it offered its free satnav application, Google Maps Navigation, to all US users running android 1.6.

UPDATE: An image of the Google Phone now appears to have turned up on Twitter, including test shots and a name: the Nexus One.