Microsoft's chief executive Steve Ballmer said on Friday that Microsoft would be pleased to have more talks with the authorities.

Joel Klein: "always prefer settlement"

"We would welcome that kind of opportunity, but it would be inappropriate for me to speculate on that here," he said in Brussels, where he is attending a business summit.

"We would love to settle this case. We were unable to in the last round discussion," he said.

He reiterated previous statements that the ruling would disrupt the growth of e-commerce, stifle innovation and put up prices.

"The judgement will restrict innovation and increase prices for personal computers and software. There were errors of law and fact in the judgement," he said.

Microsoft strategy

Microsoft has been plotting its own strategy to try to avoid complying with the ruling.

Judge Thomas Penfield Jackson said the company's abuse of its dominance in the market meant it should now be split into two separate businesses:

• One to produce and sell the Windows operating system
• The other to handle Microsoft Office and other applications software, including the Internet Explorer web browser

Opinion is mixed as to what difference the Microsoft ruling will make to industry and consumers.

Bill Gates: Fighting talk

Jon Bernstein, editor in chief of online news service Silicon.com, agrees with the US government that the ruling will result in cheaper and better products.

He said: "Apple and all Microsoft's competitors will expect to gain from this."

However, he also said the split did not in itself stop Microsoft's market dominance: "Microsoft will still be the number one player in operating systems and the number one player in applications."

Legal opinion is mixed as to how strong Microsoft's chances are on appeal.

Attorney-general Janet Reno, whose department led the legal action against Microsoft, said the ruling would have a profound impact "not only by promoting competition in the software industry, but by reaffirming the importance of anti-trust laws in the software era".

New York attorney-general Eliot Spitzer called the decision a "pretty scathing assault on Microsoft".

"For a cautious judge to reach this decision, it says a great deal about Microsoft's record of recent years."

A way to go yet

However, Microsoft has a track record of success in legal battles and Bill Gates has made it clear he views the ruling as the beginning of a new chapter in the case rather than the end.

Judge Jackson had previously ruled that Microsoft had broken anti-trust laws by using its dominant position in the computer operating system market to unfair competitive advantage.

He had then chosen to break up the company instead of imposing stringent restrictions, he said, because Microsoft had proven to be "untrustworthy" and "disingenuous".

He said Microsoft had shown no inclination to change its ways and "may yet do to other markets what it has already done in the PC operating system and browser markets."