Microsoft CEO Bill Gates said Wednesday morning that he would like to see his company to settle its antitrust lawsuit with the government. This is the first public statement from any Microsoft official about settling and it directly contradicts comments made previously by others in the Microsoft camp, who have always said that they had a strong case. Gates said at the time that he didn't know if or when such a deal might be made.

"If there's a reasonable way to settle this thing," Gates said Wednesday on the Today Show, "we'd love to do that."

Gates emphasized that any settlement would have to maintain his company's ability to innovate and make Windows the bets product it can be. But reports coming in late Wednesday suggest that Microsoft has already placed a settlement offer on the table. It was soundly denounced by the states suing Microsoft, however.

"It was a minimalist opening offer," said California Attorney General Bill Lockyer Wednesday afternoon. "It was far from what anyone in our group would expect to be adequate."

A report from Sm@rt Reseller sheds some light on the settlement offer from Microsoft, which apparently gave in on its "first boot" licensing terms. Under the current terms, PC makers are not allowed to alter the boot sequence of Windows at all