The government's breakup proposal makes no recommendation for how Microsoft's research group would be treated; that would be decided later.

A specific breakup proposal was put on the table during court-sponsored mediation talks early this year.

Even two of the plaintiffs in this case - Illinois and Ohio - agree that the government's breakup proposal is unwarranted.

Should the Court not summarily reject the government's breakup proposal, then substantial discovery, adequate time for preparation and a full trial on relief will be required.

Still, the operative faith here still seems to be that Microsoft is a good bet, no matter what happens with the breakup proposal.

Some economists have criticized the breakup proposal as likely to increase prices for consumers.

The settlement talks were limited to so-called conduct remedies because Microsoft refused to voluntarily discuss breakup proposals.

"With the interest rate window open, we are back to the breakup proposals," Mr. Martin said.

Microsoft also asked the judge to throw out the government's breakup proposal immediately, arguing that "the laws and the facts do not support such a radical step."

Two of the 19 states in the suit apparently agreed, declining to support the breakup proposal.