Researcher Adam Thomas uncovered the exploit which revolves around the way that the Internet Explorer browser handles a particular form of graphics known as vector graphics.
A properly crafted webpage can exploit this problem and install almost anything they want on the target machine.
Unusable PC
Tests by Sunbelt Software on a Windows machine patched with all the latest security updates showed attackers installing a huge amount of spyware and other malicious programs.
Any Windows PC suffering such an infection would become unusable.
Following the discovery of the bug, Microsoft issued a formal alert that tells users how to avoid falling victim while a patch is being prepared.
Microsoft said the patch would be ready for the next monthly security update on 10 October. However, it said it would release the patch earlier if the situation warrants it.
Warnings also followed from the US Computer Emergency Response Team and the Sans security organisation.
In its alert Cert said: "We are currently unaware of a practical solution to this problem."