Sequence of tenses

What's the difference between A and B below?

A) He said that he would call you back later.
B) He said that he will call you back later.

I followed the rule of the sequence of tenses in A) and changed "will" to the past tence "would." Is it acceptable and preferred in formal writing? Which is more acceptable in formal writing?

There is a whole debate about this in the thread "wish".

(A) represents a consistent use of tenses in reported speech and is the more likely form in writing, mainly because the situation is more likely to be completely in the past when someone reads it. However, when speaking, if we are still waiting for the call, we can use (B). Note, though, that (A) is correct in any case.