A motion to withdraw the case has been put to Federal Trade Commission (FTC) chiefs after legal teams representing Intel and the competition watchdog agreed the terms of an out-of-court settlement over the weekend.

The terms of the settlement were not immediately available. The case was due to start on Tuesday, as a similar trial involving software giant Microsoft enters its fifth month.

"We view this compromise agreement as a win-win for both parties and we are satisfied that the agreement gives us value for our intellectual propety rights," said Craig Barrett, Intel's chief executive.

A spokeswoman for the FTC said: "The commission set out to establish a principle and the staff believes that the proposed agreement achieves that goal."

Monopoly control illegal

The FTC had brought the case against Intel saying the company exercised monopoly control over the computer processor market and alleged that it had used this power to stifle competition.

The company was accused of illegally using its market power to withhold technical information from three computer firms, Intergraph, Compaq and Digital Equipment. This information about future Intel processors was vital to the companies' plans to develop new computer systems with Intel chips.

Intel was said to be punishing the companies for not licensing some of their own patents over key processing technology to Intel.

The company denied the charges, saying although it did take the actions outlined, it was not illegally using its market dominance to do so. Intel has argued that although it supplies processors to 80% of the world's computers, competition is thriving in the processor market with competitors making significant inroads.