Apple's lucrative deal with the State of Maine for 36,000 iBooks faces stiff opposition, as the state faces a $250 million budget shortfall.

Apple CEO Steve Jobs announced the deal during his keynote speech at Macworld Expo, San Francisco. The deal means that all 33,000 of Maine's seventh and eighth grade students, and their 2,000 teachers, will be equipped with wireless portable computers. The state opted to purchase Apple's iBooks. Jobs said of the deal: "We look at this as one down, 49 to go," referring to Maine's decision to move to Mac.

The contract is the largest single purchase of computers for public school classrooms in the US. Valued at $37.2 million over four years, the deal also brings Apple in to manage the wireless networks, technical support and maintenance.

However, not all the state's lawmakers are thrilled with the deal - citing budget shortfalls, some are suggesting the plan be scaled back, or scrapped altogether.

"Facing the cuts that the legislature is going to have to consider in health care and other essential works, you had better believe that the laptop fund is on the table," House Republican leader Joe Bruno told CNN.

Despite the opposition, State governor Angus King yesterday vowed to fight as hard as he could to save the deal, warning legislators that terminating it would be a "historic mistake".

The governor said: "This is an initiative that gives us the opportunity to finally break the bonds of being 37th in the US in income.

“Ironically, this program is getting enormous attention nationally, all favourable toward Maine, and we would look ridiculous to stop now,” he told Sun Journal online, the Web version of the local newspaper.

Apple has reason to be concerned. As the deal stands, Maine can still withdraw from the contract at no financial penalty.