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SAO PAULO, Brazil, Mar 7 (Reuters) Brazil's state-owned Banco do Brasil said on Monday it will drop Microsoft's Office software package and replace it with so-called freeware to avoid paying licensing fees.

The financial services giant is the latest part of the government to adopt free software.

President Luiz Inacio Lula da Silva has criticised costly patents and intellectual property protections on products like software for holding back developing nations.

The bank says it will save 13 million reais ($6 million) by replacing Office with Sun Microsystems' OpenOffice on its computers through the end of this year.

It also said it will install free software on its servers in 5,500 locations nationwide this year and on computers in community centres it finances that provide digital access for four million people.

($1 = 2.14 reais) REUTERS SD RN1556