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This is either going to be one of the most amusing flops / scams in recent IT history – or someone has stumbled onto something very big. But whichever way it falls, it looks like the tech bubble is back.

This month, a flotation prospectus landed at Information Age’s office, the likes of which we haven’t seen for years – maybe since 1999. Even the cover is exciting: it shows what appears to be some kind of paratrooper or guerrilla speaking furtively into a mobile phone. Why? Because, says the prospectus, “Revolution is in the air”.

The company is xG Technology, and if it is right, then the new Google – or certainly the new Skype – is in the making. If it’s wrong, we at least know that entrepreneurial tech zeal, combined with wild ambition, are still alive and, moreover, there are still brokers and markets ready to get caught up in it.

xG’s claims are extraordinary – so extraordinary, that for the past year, various experts have been debating the merits of its data communications technology, unsure whether it is a huge new breakthrough or, as many suspect, just ‘snake oil’.

xG’s technology is called xMax, which is like WiMax, the big brother version of WiFi, the wireless communications standards used by PCs and other devices. But whereas WiMax’s practical range is a few kilometers (and WiFi’s is tens of metres), xMax can boost to 48km. Mesh a few together, and you have a mobile telecoms company using unlicensed spectrum over a potentially large range. Turn the power down on the mobile devices, and it still covers 5km.

There is more. It can ship data at 50 megabits per second (mbps), compared with perhaps 14 mbps for HSDPA, the latest generation of 3G networks adopted by Vodafone and others. And it operates at a low end of the spectrum, which means it is less susceptible to interference by objects.

In fact, says xG, it can build advanced high bandwidth networks for as little as 4% of the cost of rival technologies. The prospectus notes that, while Sprint is spending $3 billion to cover a small area of the US with WiMax, xG could do the whole country for $15 million. That is partly because the low-power requirements means many fewer base stations are required.

It is “compelling”, the prospectus says breathlessly, adding, in brackets, “and again, we are not speaking loosely”. The company will initially target the voice-over-IP (VoIP) market, it says. If it works, we could all have low power, cheap wireless VoIP mobiles, at Skype-like prices, within five years. The mobile business would be truly and catastrophically disrupted.

But technology is not the only extraordinary thing about xG. In order to raise $30 million in funds, the company, based in Florida, has apparently eschewed traditional venture capital in the US, bypassed the tech-savvy Nasdaq exchange, and is going for early stage funding through an initial public offering (IPO) on the London Stock Market.

This is a very unusual move. And it is doing this not through UBS, Goldman Sachs or another flagship investment bank, but through Hichens Harrison – the oldest stock broker in the City of London (established 1803), a specialist in private clients, with annual sales of just £10 million or so.

xG’s choice of markets, and brokers, will, of course, only fuel the suspicions about its technology. Since the introduction of the Sarbanes-Oxley Act in the US, it is markedly cheaper and easier to float in London, the reporting requirements much lighter, and the opportunity for hyperbole much greater.

Aimed presumably at a small group of private clients, the prospectus is not a US-style ‘Red Herring’, with pages of disclaimers and third-party verification, but an altogether slimmer and more bullish package. With the lessons of the dot-com days still hurting, it is doubtful if any US IPO prospectus these days could be so feverishly effusive as xG’s. “xG Technology represents an investment opportunity which has the most pronounced upside of any we have seen,” it says.

Notwithstanding xG’s breathlessly positive tones, it might just have something. Apparently, the head of Princeton University’s Electronic Engineering Department has favourably reviewed the technology. And, many big IT and telecoms companies have apparently tried to open negotiations to get hold of it. xG, however, says it has refused to take part in “big company/small company” talks until it has more commercial strength.

With the help of its small IPO, xG believes it can get its revenues up to $168 million by 2008 and valued in the billions. And if that happens, the US stock markets might start ruing Sarbanes-Oxley and throwing jealous gazes at London’s new Vodafone.