Asus could be about to release a £120 laptop according to sources in Taiwan thanks to some help from Google.

According to DigiTimes: “Asustek Computer is set to launch a new netbook priced at US$200-250 in June in cooperation with Intel, and hopes to achieve its goal of shipping six million netbooks in 2011,” the news site is citing.

While DigiTimes doesn’t have a great track record when it comes to Apple rumours, it’s normally consistently better at breaking news about manufacturers from it’s own territory – ie Asus.

“The sources believe that Asustek's new netbook should either adopt Google's Android 3.0 or Chrome OS in order to achieve such a price level, and the new model is expected to attract consumers who only need to perform office work and Internet browsing,” says the site.

With no software licence to pay for Google’s open source offering and a general reduction in the cost of parts since the launch of the first Eee PC the news could translate to a model with a price of just $200-$250 helping Asus still stay cheap enough to undercut tablets like the iPad 2 and Motorola Xoom.

Asus is no newbie to the netbook market. It launched the Linux powered Eee PC in 2007 that started the craze in the first place, but soon found competition from virtually every manufacturer looking to get into on the game with cheaper and more powerful devices.

Now with the company facing threats from the tablet market as well as other netbook makers it could be about to turn to Google.

With Google Chrome OS tipped for a summer release and Taiwanese tradeshow Computex happening in May we shouldn’t have long to wait.