"This scares the hell out of me," Gates told staff members in a September 1996 message, according to a newly unsealed Sun memorandum.

In the message, written after Microsoft had licensed the Java technology from Sun, Gates fretted that Java would make Windows irrelevant to software application developers.

"Understanding this is so important that it deserves top priority," Gates said.

At the time, Gates was publicly portraying Java as an interesting programming environment for developers but hardly a threat to Windows.

An unidentified Microsoft executive working on the issue responded to Gates in an April 1997 memo that the key question was "How do we turn Java into just the latest, best way to write Windows applications?"

Sun lawyers, who have charged in a lawsuit thatMicrosoft signed a license for Java and then tried to "hijack" it, contend the language is evidence of Microsoft's determination to "destroy the cross-platform capability" of Java.

A federal judge in San Jose, California, who heard arguments in the case last month is due to rule soon on Sun's request for a key injunction against Microsoft.

At least one Sun executive read the licensing agreement signed by Microsoft and concluded that the software giant based in Redmond, Washington had outmaneuvered its Silicon Valley rival.

"(Microsoft executives) were smarter than us when we did the contract," said David Spenhoff, director of product marketing for Sun's JavaSoft division, in a fall 1996 E-mail message.

Spenhoff's reading of the contract supports the position of Microsoft executives, who contend they have the right to "improve and enhance" Java technology for Windows in ways that might differ from Sun's implementation.

"What I find most annoying is that no one at Sun saw this coming," Spenhoff said."I don't think our folks who negotiated and agreed to these terms understood at the time what they meant."

A Sun spokeswoman said Spenhoff's comments were based on a cursory reading of the contract by an executive with no legal training and did not represent the company's view. Spenhoff no longer works for Sun.