By BBC News Online's Kevin Anderson in Washington

Virtually every US Government computer system is ready for 2000 and will beat the millennium bug, according to a government report.

Only 16 out of more than 6,000 systems are not ready for the turn of the century, it says.

President Bill Clinton said: "As of today, 99.9% of the government's mission critical computer systems are Y2K compliant."

The Office of Management and Budget report put the total cost of upgrading and testing the government systems at $8.38bn.

The millennium bug results from the computer programming practice of storing dates in two-digit form on older computers to save memory space.

Unfortunately, some computers might interpret '00' as 1900 instead of 2000, causing system failure or unpredictable behaviour.

Tank problem

Three years ago, only 20% of the US Government's computer systems were ready for the turn of the century, Mr Clinton said.

The Department of Defense has 2,106 of the government's 6,159 "mission critical" computer systems, giving it the heaviest Y2K burden among federal agencies.

But only six of its systems still need further work, including a software problem with the Army's M1A2 tank.

Government officials stressed that the country's nuclear weapons systems were Y2K compliant.

"The bottom line is there is no risk - no increased risk of an accidental launch," said John Koskinen, the director of federal Y2K preparations.

Not 100% certain

But Mr Koskinen and the president both said that despite the amount of preparation there would be glitches.

And he stressed the importance of contingency plans to deal with the inevitable glitches.

"Y2K-related failures need not mean that work grinds to a halt," Mr Koskinen said, adding that organisations deal with unplanned problems every day.

"The question is, how do you work around whatever glitches occur and surface, and how can quickly can you restore normal operations?"