Microsoft in schools handout

Less than three weeks after reaching a deal in its antitrust battle, Microsoft has signed a $700m (£493m) settlement agreement...

Less than three weeks after reaching a deal in its antitrust battle, Microsoft has signed a $700m (£493m) settlement agreement for the private law suits that allege the company overcharged for its software.

In what analysts are already calling a public relations victory rather than a punishment, Microsoft's deal will supply computers and software to more than 14,000 of the US's poorest schools over the next five years as settlement of the remaining private suits against it.

Plaintiffs in the private antitrust lawsuits claim that Microsoft used a desktop operating system monopoly to force them to pay inflated prices for its software. The proposed deal would settle a majority of these suits.

The settlement has yet to be approved by the Federal District Court of Maryland, which is overseeing the class action suits. A hearing is scheduled 27 November.

"We have reached a settlement in over 100 private class action suits that avoids long and costly litigation for the company," said Microsoft chief-executive Steve Ballmer.

The school-software proposal was introduced when plaintiffs realised that, with at least 65 million individual cases, settlements could be reduced to some $10 apiece.

Under the deal, Microsoft will provide software to all schools where at least 70% of the students qualify for free or reduced-price lunch programmes. The company will also provide some 200,000 "Pentium-class" PCs and Macintosh computers each year during the five-year settlement period, and contribute $90m (£63m) to teacher training.

Microsoft said that the estimated value of the software donations would far exceed $500m.

Microsoft would also be responsible for creating a national foundation that gives grants to local and community organisations for purchasing computers and software.

The agreement could end years of legal wrangling for Microsoft, but few saw the deal as punishment for the software maker. The company could be given unprecedented access to millions of new computer users.

"It's a publicity coup for Microsoft," said Jupiter MMR director Ross Rubin. "It doesn't smack of any punishment."

Read more on Business applications