Microsoft's founder, Bill Gates, who led the company's efforts to reach a settlement with the government in its anti-monopolies trial, returned to the attack yesterday.

In comments made after Judge Thomas Penfield Jackson ruled that the world's largest software company had broken anti-monopolies laws, Mr Gates said that the ruling would not lead to a break-up of the company.

"I don't think any kind of extreme remedy such as a break-up is at all consistent with what the court put forward," he said. "Common sense stands on our side."

Mr Gates, who stood down from the day-to-day running of the business in January, has made few forthright comments on the case since the judge delivered his first negative ruling in November. But since settlement talks broke down over the weekend and the judge delivered his almost entirely negative verdict on Monday, Mr Gates has turned to criticising the government's position.

"The principle at the centre of this case is very important for the economy. The lack of [government] regulation of the software industry has been key to its success to date," he said.

This argument flies in the face of the verdict handed out by Judge Jackson. In his historic decision, the judge found that Microsoft violated the law by using anti-competitive means to maintain its stranglehold on the personal computer industry and to prevent competition in the fledgling internet browser market.

The European commission has stepped up its own investigation into Microsoft and the ruling has given sustenance to more than 100 private lawsuits already filed against the company in the US.

Wall Street analysts, most of whom are still supportive of Microsoft, yesterday suggested that the uncertainty would continue to hit the group's share price.

After falling 15% on Monday, the company's shares were down a further $2 yesterday at about $88 as the technology sector continued to be hit by falling confidence. The Seattle-based company has already said that it will appeal against the eventual remedy decreed by Judge Jackson.

Even the expedited appeal asked for by the company is likely to take six to 12 months. During such time, the company expects the software market to change even more significantly.

Brad Smith, a senior lawyer for the company, said after the ruling: "At bottom, this is a case about our decision to integrate the internet into Windows."

He indicated that all software would soon include an ability to link to the internet.

Andrew Roskill, industry analyst at Warburg Dillon Read, the investment bank, agrees with Microsoft. "The whole case has been ridiculously moot," he said. "The entire market has already changed."

But the judge has ruled that Microsoft's bundling of its browser with Windows, which is used on more than 90% of the world's personal computers, broke laws designed to curb monopolistic power.

In spite of this week's bravado, Microsoft executives do admit to having made mistakes. Mr Smith said on Monday night: "We have already learned a lot - about our responsibility as a corporate citizen, about our responsibility as a business partner."