US District Court Judge Thomas Penfield Jackson yesterday appointed a mediator in the anti-trust dispute between Microsoft and the US Justice Department.

The move by Judge Jackson stirred speculation that the parties could be heading toward an out-of-court settlement in the case.

The US government and an alliance of 19 states have accused the software giant of having engaged in predatory, anti-competitive practices.

In a one-paragraph order late yesterday, the judge said the matter would be "referred for voluntary mediation" to Judge Richard Posner, chief judge for the US Court of Appeals for the Seventh Circuit in Chicago.

Acting in a private capacity, according to the order, Judge Posner will determine "the manner and duration" of the mediation proceedings.

In a stinging rebuke of Microsoft November 6th, Judge Jackson found the company had used its monopoly position in the operating systems market for personal computers to punish rivals and distort competition - all to the detriment of consumers.

The 207-page document was a "finding of fact", his interpretation of evidence presented to him during a trial that began here October 19th, 1998.

He is now scheduled to issue his "conclusions of law" on whether or not Microsoft has violated US antitrust legislation. An affirmative ruling would then require him to draft remedies to restore competition to the operating systems sector.

But the harshness of Judge Jackson's findings of fact suggested to legal analysts he was hoping to prod the parties - notably Microsoft - into reaching an understanding among themselves.

In a separate order yesterday, Judge Jackson set February 22nd as the date for oral arguments before him on his proposed conclusions of law.