Microsoft has secured an invaluable 12-month breathing space in its battle with the US Justice Department by getting its appeal heard in the intermediate federal appeals court rather than going straight to the Supreme Court.

The DOJ and the U.S. states sued Microsoft, arguing that the company has engaged in illegal business practices aimed at squashing competition and used its desktop operating systems monopoly to make inroads into other markets.

The judge hearing the case - Judge Thomas Penfield Jackson - ruled in favour of the U.S. government case in June, ordering that Microsoft be broken up into two companies - an operating systems business and an applications operation. He also imposed a number of behavioural restrictions on the software giant.

Later in June, Judge Jackson sent Microsoft's appeal straight to the Supreme Court, which if it had failed could have led to a rapid break up of the company. Jackson’s ruling against the software vendor is on hold pending a decision on Microsoft's appeal.

Yesterday, however, the Supreme Court Judges voted 8 to 1 in favour of sending the software giant's appeal to the federal appeals court first.

In the past the appeals panel has proved much more sympatheitic to Microsoft than the trial judge.

According to Don Young, an analyst with PaineWebber, many of the judges due to hear the software giant’s remonstrations are “strongly supportive” of Microsoft, while “none of them are strongly supportive of Judge Jackson."

Microsoft is due to file its proposed briefing schedule with the federal appeals court by Monday 2 October.

The U.S. Department of Justice (DOJ), which brought the antitrust case against Microsoft along with 19 U.S. states, will reply with its own proposed brief schedule by 5 October, with a further round of reply briefs due on 10 October.

The extra breathing space afforded to Microsoft will also mean the case won't be completed under President Clinton's administration.

Should Texas Governor George W. Bush win the upcoming presidential election, many believe Microsoft could escape unscathed as the Republicans have expressed scepticism regarding a proposed breakup of the company.