Microsoft is preparing to offer new concessions to the European Commission in a final attempt to gain clearance for its investment in the UK cable operator Telewest.

The US software giant will submit its renewed offer today, the final day on which undertakings can be submitted. It has been in discussions with Commission lawyers over the past week to address its concerns.

The Commission has sent a draft decision to EU governments saying it planned to block the purchase of the 25.5 per cent shareholding in Telewest.

Microsoft officials insisted they would still gain clearance for the investment. "We don't think the case should be terribly controversial and we are confident we will get to complete the transaction," said Mr John Frank, senior director of law and corporate affairs at Microsoft Europe.

Brussels is thought to be concerned that the investment would allow Microsoft to extend its dominance over software for personal computers into the software required to run set-top box decoders used to receive digital television. Telewest uses operating software supplied by Liberate the US group that is Microsoft's main rival in its set-top boxes.

Microsoft declined to say what further concessions it would offer. One option is for the company to take a reduced stake in Telewest. An alternative would be for Microsoft to distance itself from Liberty Media, the US media group that has a 22 per cent stake in Telewest. This would ensure the groups could not co-operate to control the cable operator. The Commission said the companies were still in negotiations with officials and had been since the draft decision was drawn up.