BRUSSELS, March 23: US software giant Microsoft faces a record fine of nearly 500 million euros and hard-hitting changes to its flagship product when European regulators announce their verdict to a five-year probe on Wednesday.

The European Union's competition commissioner Mario Monti on Monday won the backing of EU member states to fine Bill Gates' titan 497 million euros ($613 million) for breaking EU anti-trust law, sources said.

The unprecedented size of the financial penalty might not hurt Microsoft, which has cash reserves of some $53 billion. But enforced changes to its Windows operating system, which powers nine out of 10 of all personal computers, will.

Mr Monti, provided his proposals are endorsed by the rest of the commission on Wednesday, will order the company to detach its multimedia programme Media Player from Windows to give rival products a more level-playing field in Europe.

The Seattle-based company, denying that it abuses its overwhelming dominance to illegally crush competitors, has already vowed to appeal the verdict to the European Court of Justice.

After largely settling its anti-trust problems at home through a hotly disputed deal with the US Justice Department, Microsoft sees no reason why it should undergo a drastic product overhaul in Europe.

Being forced to unbundle Media Player would be the thin end of the wedge for a company that has made offering consumers an all-in-one suite of applications the centrepiece of its hugely successful business strategy.

Microsoft spokesman Lou Gellos said the only stumbling block in last-ditch settlement talks last week between EU regulators and Microsoft was "our capacity to innovate" with applications like Media Player.

To date, the biggest fine levied by the commission on a company for breaking competition rules was a 462-million-euro penalty against the Swiss chemical firm Hoffman-Laroche in 2001 for forming part of a vitamins cartel. -AFP