The first hearing in the US Justice Department's landmark antitrust lawsuit against Microsoft is expected to take place in Washington today. The US government is expected to push for expedited action on its request for a preliminary court order imposing broad restrictions on the software company.

The case will be heard by Judge Thomas Penfield Jackson, who sided with the government in a separate case against Microsoft when it was accused of violating a 1995 antitrust settlement agreement. That case is now on appeal.

Judge Jackson criticised Microsoft's tactics in the earlier case, in which he concluded that its Windows 95 operating system and its Internet browser could easily be separated.

In part, arguments in the new case are expected to be similar. The government is demanding that Microsoft either de-couple its Internet browser from Windows 98, the latest version of the software, or include an alternative browser from Netscape, its rival.

In addition, the government is seeking changes to Microsoft's contractual arrangements with PC makers, Internet service providers (ISPs) and online services such as America Online.

Microsoft lawyers are already expecting an appeal against Judge Jackson's ruling on the preliminary injunction.

The preliminary phase of the Justice Department's lawsuits could be concluded in weeks but the main body of the case, in which it will have to prove its allegations that Microsoft has abused its market power, could drag on for years.

The similar case against Microsoft filed by 20 state attorneys general and the District of Columbia is likely to be consolidated with the Justice Department case, legal experts said. However, it was not clear how additional issues relating to Microsoft's office productivity software, raised only in the states' case, would be handled.

Microsoft's chairman and chief executive, Mr Bill Gates, described the law suits as "a step backwards for America, for consumers and for the personal computer industry". He said that the law suit would be "counter productive, costly to taxpayers and ultimately unsuccessful".

He also dismissed as an "outrageous lie" the suggestion that Microsoft had attempted to conspire to share the browser market with Netscape.

Mr Joel Klein, head of the Justice Department's antitrust division, has warned that his probe of Microsoft is not limited to the browsing software that could appear on shelves at the end of June.

"We are filing this action now to address time-sensitive aspects of the shipment of Windows 98, aspects that could significantly harm competition.

"Our investigation of other Microsoft practices is ongoing."

For Microsoft, according to Mr Peter Krasilovsky, vice-president of Maryland-based Arlen Communications, the worst-case outcome would be a forced restructuring, "with a separation of content and software that they [Microsoft] would feel would be completely arbitrary".

"Microsoft is interested in taking branded commerce areas on the World Wide Web and using its tools to make searching and buying easier. They've targeted real estate, they've targeted local events where they can sell tickets, they've targeted travel . . ."

What the company fears, he added, is an argument by the government that all such operations should not be integrated into the Windows operating system, now used in 90 per cent of personal computers.

Without such integration, competitors would stand a better chance of promoting their products in the system, the Justice Department could maintain.

"When you open up Pandora's box with an antitrust suit, many things can happen," Mr Krasilovsky said.

Another and more immediate source of anxiety for Microsoft is the government demand that Navigator, the Netscape browser, be included in Windows. "If they were to allow . . . Netscape navigator, Netscape could start demanding other things," according to Mr Krasilovsky.

As a result, the appearance of Windows, tightly bundled with other Microsoft products, would be drastically changed. But according to James Brock, corporate analyst and professor of economics at Miami University in Ohio, such a scenario might not be all that bad for Microsoft.

"What might happen is that as others get in or expand in the field, we would see a lot more competition . . . If others take advantage of those opportunities and Microsoft responds and everyone is on a more level playing field, it might be that Microsoft and everyone comes out ahead."

Prof Brock added that with near unlimited financial resources Microsoft could mount a comprehensive challenge, tying up the case for years until the government gave in and dropped the matter.

That is what happened in 1982 when the Justice Department abandoned an effort to break up IBM after 13 years of litigation.