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The company, which better known by the Panasonic name it uses to brand its products, began manufacturing the batteries in test quantities in April; it expects to begin shipping five million per month by the end of the year.

Sony's recall was caused by small shards of metal that got trapped in the battery cells during manufacturer could create a short circuit leading to the battery overheating. Matsushita says that its new process does not eliminate the possibility of shards entering the cells but instead ensures that these cannot overheat.

Spokesman Akira Kadota said that initially the new process would only be used for laptop batteries. The company expects that between half and all its lithium-ion output will be insulated by 2009.

Matsushita currently has around 13 per cent of the global market for lithium-ion batteries, behind Sanyo, Sony and Samsung.