Microsoft faces having to make radical changes to meet European regulatory concerns that go well beyond what is being demanded of it in the US.

After a three-year investigation, European antitrust regulators are studying wide-ranging measures to prevent Microsoft from using its strong position in the software market to injure competitors, according to people familiar with the case. They are said to be minded to take a tough line against the company, though final decisions have not been taken.

The measures under consideration would force Microsoft to change the way it produces and sells its Windows operating system and Media Player software, and to provide a large amount of technical information to competitors.

They would go well beyond the terms of last year's settlement between Microsoft and the US government, which also investigated the company's alleged anti-competitive practices, and could further sour relations between the two antitrust authorities following last year's high-profile spat over General Electric's $43bn takeover of Honeywell.

William Kolasky, who heads the US antitrust division's international affairs, this week said monopoly leverage cases remained an area where European Union policy had been "unduly protective of competitors", a thinly veiled reference to the Microsoft case.

People familiar with the matter said Mario Monti, European competition commissioner, and his officials had still not decided what measures to impose on Microsoft. They warned that discussions were still at an early stage and any decision on possible fines, which could total up to 10 per cent of Microsoft's turnover, was months away. Microsoft and the commission declined to comment.

However, it is understood that the authorities are considering asking Microsoft to separate its media software Media Player from Windows.

Microsoft's rivals, led by AOL Time Warner, have alleged that incorporating Media Player as a standard feature of Windows gave the software an unfair advantage over rival programs, such as Real Networks' Real Player. Microsoft rejects the allegations.

One solution being studied in Brussels would be to allow computer makers to choose between a Windows with Media Player and one without it.

Such a move, which would force Microsoft to produce a slimmed-down version of Windows, is much more radical than that favoured by the US company. Microsoft is understood to be willing to negotiate a solution similar to that agreed with the US government and some states, which allows computer makers to hide the Media Player icon from desktops but not to remove the entire program.

The commission is also considering asking the company to provide a host of technical information to rival makers of servers - large computers that are the gateway to the internet and e-commerce.