Microsoft's latest offer to end its long-running anti-trust case with the European Commission has been rejected, according to reports this week.

The Redmond-based software giant had offered to settle the case by putting competitors' software on CD-ROMs sold with computers. But, according to sources quoted by Reuters earlier this week, the Commission believed that the CD-ROMs distributed with new computers would get little use and would be an ineffective channel for distribution.

The commission's proposed final decision, which may not include any suggested remedies to its anti-trust concerns, is expected to be considered by an advisory committee made up of representatives of the 15 EU states in the first and third weeks of March, a second source familiar with the case said.

According to a draft decision, the European Commission has ruled that Microsoft abused its dominant position and curbed competition by tying its Media Player software - used for playing music and videos - to its Windows operating system.

The commission has been considering an order that would force Microsoft to un-bundle Media Player from Windows, which the firm insists would wreck the system.

Alternatively, it has considered an order which would require Microsoft to bundle in the audio-visual software of rivals, but as a part of the software package on the computer rather than on a separate CD-ROM.

The commission has also determined that Microsoft uses its Windows monopoly to damage competitors selling low-end servers and audio-visual software.

The commission decided that Microsoft's servers run better with its Windows program than with those of rivals. It wants Microsoft to give rivals enough information so their servers work as smoothly with Windows as Microsoft's.