After a summer break from its legal battles, Microsoft found itself back in trouble yesterday when a US judge ruled that the company had engaged in "wanton, reckless" and deceptive business practices.

The Seattle-based behemoth was ordered by a federal judge to pay $1m in punitive damages to Bristol Technology, a tiny software manufacturer. The award is the largest to be imposed in Connecticut for violating the state's unfair trade practices act.

In a further blow to Microsoft, Judge Janet Hall is to reconsider whether the company broke local anti-trust statutes. Her ruling could reopen a trial that seemed to be over a year ago when a jury rejected the anti-trust objections and awarded Bristol punitive damages of just $1.

Microsoft said it would appeal against yesterday's decision.

The judge found that senior Microsoft executives had not told the truth during testimony. The 103-page judgment cites an internal Microsoft email from chairman Bill Gates as evidence of this untruthfulness.