A Microsoft spokesman denounced reports that the software maker and the US government are closer to reaching a settlement in the federal antitrust case.

Jim Cullinan, a Microsoft spokesman, said: "When the reports say 'sources close to the case', then unfortunately the sources don't have to stand behind what they say." He added that the sources in question must be from the government because Microsoft is following its policy of not commenting about specifics of the talks.

The Wall Street Journal and the Washington Post published similar reports yesterday. Both cited anonymous sources, and claimed the two sides are moving closer to an agreement that could place restrictions on how Microsoft does business, but which would not break up the company.

It's not Microsoft "It's not Microsoft," Cullinan said about the source of the anonymous information. He added that "Microsoft has been very consistent" in having its legal team not share details of the negotiation process, which is being conducted through a court-appointed mediator. Cullinan said that corporate communications officials have not been privy to details of the discussions, and that the mediation process is continuing.

DOJ spokeswoman Gina Talamona said today she is not commenting about the mediation discussions.

Microsoft and the US Department of Justice have been engaged in settlement talks. Reports indicate that the government is pushing for a break-up of Microsoft, which Microsoft opposes.

Legal or illegal monopoly Judge Jackson is said to be close to issuing his final ruling in the matter. He ruled last November in what are called "findings of fact" that Microsoft is a monopoly and has used that power to squelch competition and extend its reach into the Internet browser market.

Jackson has not yet ruled on whether Microsoft is in violation of antitrust law. It is not illegal in the US for a company to be a monopoly. But, it is illegal to use monopoly power to stomp the competition.

A settlement before Jackson issues his final ruling would end the federal case, although Microsoft faces dozens of civil cases that were filed following the judge's findings of fact. Information from the federal trial, including depositions and documents, could be used by attorneys for plaintiffs in the civil cases, legal experts have said.

Subject to approval Judge Jackson would have to approve any settlement in the case, though published reports have said that he is urging both sides to settle. That he appointed a mediator in the first place suggests his desire to have the matter resolved, before he issues a ruling.

Meanwhile, the head of the DOJ's antitrust division spoke yesterday before a US Senate panel about the case. Joel Klein reportedly declined to comment about specifics of the negotiations other than to say they are continuing. He told senators that a settlement is preferred, but would have to be consistent with the findings in the case and address Microsoft's conduct.