Microsoft Corporation and the European Commission have agreed the US software giant can sell a stripped-down version of its Windows operating system under the name "Windows XP Home Edition N".
Microsoft's Windows XP Professional Edition will also include the "N" for versions sold in Europe without its Windows Media Player audiovisual software, according to the Wall Street Journal .
The deal represents a small step in Microsoft's long battle with the EU's executive body, which last year ruled the US software giant had abused the near-monopoly of Windows to crush competition and fined it a record $648 million, the Journal said.
The commission ordered Microsoft, founded and headed by billionnaire entrepreneur Bill Gates, to sell a version of Windows without its Media Player, and the two clashed over a suitable name.
Europe fined Microsoft last year after finding that bundling Media Player with Windows harmed rivals such as RealNetworks .
Microsoft was ordered to ship some versions of Windows in Europe without Media Player and share data protocols with server makers, even as it appeals the ruling.
Analysts expect it will take months for a Windows version without Media Player to reach the shelves, as retailers will first work down existing inventories.
"The question is whether anybody wants it anyway," said Philip Connelly, an analyst at UK IT market researcher Ovum. "I'm not saying the Commission was wrong, but the outcome doesn't seem to be what they were looking for."
In January, EC regulators rejected Microsoft's clunky preference - "Windows XP Reduced Media Edition" - and Microsoft furnished alternatives, said Dirk Delmartino, a Microsoft spokesman in Brussels, who declined to reveal them.
Sensitive to charges made by rivals that the company continues to abuse its operating system monopoly, Mr Delmartino added that Microsoft "will look at the feedback and see what we have to work with. Then it should be good to go - if there is a delay, it is certainly not Microsoft's fault."