Software giant Microsoft wants computer manufacturers to put at least three of its icons on the new Windows XP operating system desktop, completely undermining its previous move to open up the desktop space to competitors.

Last month, as a direct response to a US Appeals Court ruling in June that some of Microsoft's licences were improper, the company said it would limit licensing restrictions, allowing new flexibility for manufacturers to customise the look of the desktop.

But Microsoft has quickly back-tracked on its decision and is now demanding, ahead of the 25 October launch date for XP, that at least three of its icons, including either Internet Explorer or Movie Maker, must feature alongside competitors' icons.

Microsoft spokesman Jim Cullinan told IDG's News Service that of the eight slots on the new Start menu that provide shortcuts to applications, three are reserved for Microsoft, with the remaining five configurable by the PC company.

But some of the companies whose icons could potentially appear on the Start menu, including AOL, are unhappy with this new restriction.

"Microsoft is undoing the flexibilities they announced in July," said John Buckley, a corporate vice president at AOL. "Or the so-called flexibilities are not what Microsoft says they are."

"Microsoft is saying to consumers, to OEMs [original equipment manufacturers] and, most importantly, to the [US] Department of Justice, 'We own the desktop and there's nothing you can do about it'," said Buckley.

Computer-maker Compaq was one of the first manufacturers to take advantage of the flexibility, immediately announcing it would incorporate AOL's icons on to its desktop.

Neither Compaq or Dell would comment on the new announcement.