June 1 (Reuters) - European trade group CISPE denied a report on Saturday that it was nearing a settlement with Microsoft to withdraw its antitrust complaint with the European Commission about the U.S. company's cloud computing licensing practices.

CISPE, whose members include Amazon and 26 small EU cloud providers, filed a complaint with the European Commission in late 2022 alleging that Microsoft's new contractual terms were harming Europe's cloud computing ecosystem.

Politico reported earlier that Microsoft was closing in on a multi-million euro deal with CISPE for it to drop its complaint, citing two unnamed sources.

"These rumors are incorrect," said Cloud Infrastructure Services Providers in Europe, when contacted by Reuters about the Politico report. "Discussions between CISPE and Microsoft are ongoing, and while proposals have been made, no agreement has been reached."

"Any offer will need to be submitted for acceptance to the association’s General Assembly, which includes 34 European cloud providers located in over 14 Member States," it added.

Politico also reported that the deal had not been yet accepted by members of the CISPE. It said separate payments could also be made to individual companies, citing one unnamed source.

Microsoft, Amazon and the European Commission did not immediately respond to requests for comment on the Politico report outside regular business hours.

Reuters previously reported that Microsoft was in talks with CISPE to resolve the European Union antitrust complaint.

CISPE said in its complaint that "Microsoft’s ongoing position and behaviors are irreparably damaging the European cloud ecosystem and depriving European customers of choice in their cloud deployments."

Working the issue out bilaterally could help Microsoft stave off a possible lengthy EU investigation that could lead to a possible fine and an order to change its business practices.

(Reporting by Gursimran Kaur, Utkarsh Shetti and Mrinmay Dey in Bengaluru Editing by Shri Navaratnam, Tom Hogue and Ana Nicolaci da Costa)