The US Justice Department was joined by Microsoft's competitors in celebrating the judge's ruling that the software giant has monopolised the market.

After Judge Thomas Penfield Thomas Jackson declared that the software giant had used its position to damage competing firms and consequently harmed consumers, Assistant Attorney-General Joel Klein said the findings ought to result in the judge imposing "serious remedial redress" against Microsoft.

"It shows, once again in America, that no person and no company is above the law. This is a tremendous victory for America's consumers."

As he responded to the report in November, Mr Klein stood alongside his boss, Attorney-General Janet Reno, and Connecticut Attorney-General Richard Blumenthal, a spokesman for the 19 states who joined the action with the Justice Department.

Mr Blumenthal called Microsoft a "predator that has misused monopoly power".

"These are serious and far-reaching violations that should lead to serious and far-reaching remedies," he said, refusing to rule out any of the possible punishments against Microsoft - which could even result in the firm being broken up.

But Mr Klein said the Justice Department would be willing to talk about a settlement as long as Microsoft addressed its violations of consumer choice and stifling of competitors' innovation.

"We have always said we are prepared to discuss settlement so long as the important competition issues are fully addressed," he said. Several earlier attempts to settle the action have failed.

Microsoft's founder and chairman, Bill Gates, was quick to fight back and rejected the judge's ruling.

He said: "We respectfully disagree with a number of the court's findings and believe the American legal system ... will affirm that Microsoft's actions and innovations were fair and legal and have brought tremendous benefits to millions of consumers."

Mr Gates said the court's findings did acknowledge that Microsoft's actions accelerated the development of the internet, reduced the cost to consumers and improved the quality of Web-browsing software.

"Microsoft competes vigorously and fairly. Microsoft is committed to resolving this case in a fair and a factual manner, while ensuring that the principles of consumer benefits and innovation are protected."

Microsoft's 'aura diminished'

While Microsoft was less than pleased, Silicon Valley competitors were elated at the monopoly ruling.

James Barksdale, former chief executive of Netscape, said: "It's a big day for the whole industry, and it vindicates our position."

Netscape, now owned by America Online (AOL), has long maintained that Microsoft's monopoly caused it to lose its share of the browser market. The browser wars played a central role in the Justice Department's case.

Local radio reported that Netscape employees were holding a party to celebrate the 207-page "finding of facts".

Other rivals believe that the ruling will spur on firms to develop products that are best for their customers rather than those that are least likely to irritate Microsoft.

Michael Morris, chief lawyer for arch-rival Sun Microsystems, said: "The aura that surrounded Microsoft as this all-powerful, inexorable force that always won has now been significantly diminished.

"To the degree that people in this business take heart in that ... I think they will be more likely to make their business decisions, investment decisions and innovation decisions more on what's best for their customers and the consumers and less with respect to what will Microsoft will say or do in response."