Microsoft was publicly warned yesterday that it had one more week to comply with the antitrust sanctions imposed by the European Commission last year, or face fines of up to $5 million (€4 million) a day.

The US software group has until the end of this month to hand in a final proposal saying how it intended to implement the commission ruling. Should the proposal fail to meet the commission's demands, Brussels can impose fresh financial penalties.

It would be the first time a company has been punished for failing to comply with an antitrust ruling. The penalties would come on top of the record €497 million fine imposed in March 2004, when Microsoft was found guilty of breaking European Union antitrust law.

Neelie Kroes, the EU competition commissioner, told Reuters yesterday: "The deadline is the end of this month and if it's not met then it's the end of the game."

She added: "We made a deal that before the end of the month we would reach an agreement. We are waiting for the Microsoft people to do their homework."

A Microsoft official in Brussels said: "We continue to work hard with the commission to reach an agreement on full compliance with the decision."

At the heart of the dispute is an order in last year's antitrust ruling that forces Microsoft to share sensitive information about its Windows operating system with rivals.

This information, which covers communications protocols, is intended to help other companies design server software that functions smoothly with Windows-driven computers. The commission hopes this in turn will erode what it views as Microsoft's unfair advantage.

However, the commission and Microsoft have for months been unable to agree on the conditions under which the protocols should be made available. The argument has focused on how much the company can charge for licensing the protocols.

Ms Kroes last month warned Steve Ballmer, Microsoft chief executive, that she expected compliance in weeks rather than months. The commission believes Microsoft's proposed fees are excessive and that the group may only charge for information that is innovative, valuable and protected by intellectual property rights. - (Financial Times Service)