According to reports the new version will be called "Windows XP Home Edition N" – a name that has found more favour with the European competition authorities than Microsoft's 10 previous suggestions.
These included Windows XP Reduced Media Edition, which the Commission felt was likely to discourage purchasers from buying the Media Player-free software. On the approved title, the "N" stands for "Not with Media Player".
The agreement is the latest step taken by Microsoft to comply with sanctions imposed upon it last year, following a Commission ruling that the software giant broke competition law by leveraging its near monopoly in the market for PC operating systems onto the markets for work group server operating systems and for media players.
The company was fined €497 million; ordered to disclose to competitors, the specifications (but not the source code) for its client-to-server and server-to-server communications protocols; and required to offer for sale in Europe a version of Windows without Windows Media Player, although it can also market the operating system with Windows Media Player.
However, in past weeks the Commission has expressed concern that Microsoft is not adequately complying with all the sanctions and has hinted that the software giant could be fined a sum that equates to up to £5 million a day.
Speaking to Reuters, Microsoft's senior European lawyer, Horacio Gutierrez, said, "We have some misgivings about the chosen name, as we fear it may cause confusion for consumers about the product, but we will adopt the Commission's name in order to move forward and accelerate the pace of the implementation process".
