The protest note - literally worth only the paper it is printed on - is being promoted by 5th Pillar, a group that campaigns on behalf of ordinary Indians who are forced to grease the palms of millions of civil servants.

Vijay Anand, head of 5th Pillar, said the bill, which looks similar to a real 50-rupee note, was first distributed to students in the southern state of Tamil Nadu to encourage them to reject Indias "baksheesh" culture.

"The corruption prevailing in the common mans life is painful and it can be dealt with by the zero-rupee note," said Anand.

Many Indians are resigned to having to pay extra for government services and to smooth daily transactions such as registering a birth, getting a driving licence or avoiding the attentions of an unscrupulous traffic officer.

But Prime Minister Manmohan Singh has often spoken out against the damaging effect that bribes, extortion and fraud have on all levels of life, and said the problem threatens Indias future economic prospects.

Campaign group Transparency International, in its latest annual report, stated that each year almost four million poor Indian families had to bribe officials for access to basic public services.

In the same report, India slipped further in its corruption index from 72nd to 85th in a list of 180 countries.

Anand said the zero-rupee note, which was conceived by an Indian professor living in the US, gave people the chance to register a grassroots protest against low-level corruption.

"We are confident it will change the way people think and act in the coming years," he said.

The bill, which like all Indian notes is graced with a picture of independence leader Mahatma Gandhi, carries 5th Pillars email address and phone number and the solemn vow "I promise to neither accept nor give a bribe."

Volunteers hand them out them near places where officials are often on the look-out for a backhander, such as railway stations and government hospitals.

Though questions remain over whether it is legal to print the fake - if worthless - money, more than one million bills in five languages have been distributed.

Anand said they have even had a practical effect, often shaming officials into getting business done efficiently without using real cash.

"There has not been one incident where a zero-rupee note has created a more serious situation," said Anand.

Ravi Sundar, an IT recruiter in the southern city of Coimbatore, said he used the notes whenever he had government business to sort out.

He gave one example where a tax official refused to process documents unless he paid her 500 rupees.

"I handed over the zero-rupee note which I always keep in my pocket," said Sundar.

"She was afraid and didnt want to take it. She completed the job immediately and said she was sorry and asked me not to take it forward."

Parth J Shah, president of the Centre for Civil Society think tank, said the root of the problem lay in state-run companies and their vast bureaucracies.

"Unless we remove monopolies and the kind of licensing system that we have in many areas of life to create more competition, we are unlikely to get rid of low-level corruption," he said.

Anand said he hoped to introduce the zero-rupee note across India, but he insists he remains an optimist about human behaviour.

"We havent given up on officials. There are honest ones in every department," he said.