AMSTERDAM (Reuters)—Microsoft has a strategy to discount its products heavily when the software giant competes for orders against the emerging license-free Linux operating system, the International Herald Tribune newspaper said on Thursday.

The newspaper said that according to internal Microsoft emails it obtained, Microsoft’s chief sales executive Orlando Ayala authorized executives to offer steep discounts.

“Under NO circumstances lose against Linux,” Ayala was quoted saying by the newspaper, adding the discounts could be paid for by a special fund.

No-one at Microsoft was immediately available for comment.

Microsoft is the dominant operating software on desktop computers around the world, while it is pushing into the market for more powerful and expensive computers. A range of Microsoft rivals are promoting Linux as a cheap alternative to Microsoft’s Windows.

The discounts cash-rich Microsoft is said to be offering may put further pressure on the world’s largest software company, which is under investigation by European market regulators for abusing its market dominance.

Governments and organizations in many countries are interested to use Linux on desktop computers, which is already a successful rival to Unix and Windows in server computers, used to power Web sites and corporate software.

“Governments in the Asia Pacific region and several in Europe and South America are encouraging government departments and enterprises to consider alternatives to Microsoft,” said the editor in chief at market research group Gartner.

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‘Nuff Said.