The Justice Department and US states bringing an antitrust case against Microsoft are expected to file a joint proposal on Friday to split the software giant in two, sources familiar with the case said yesterday.

The sources said the states will join the federal government in proposing to break Microsoft into two separate companies, one to manufacture the Windows operating system and the other to make applications, such as Microsoft Office programmes.

The judge in the landmark antitrust case ruled on April 3rd that Microsoft had violated antitrust laws by abusing monopoly power. On April 5th, he ordered that the Justice Department and 19 states file their proposed remedies by this Friday. But he said they could file separately if they were unable to agree on an approach.

They have now agreed to file jointly, the sources said, although a few states may file minority comments.