May 4, 1998

Government is becoming increasingly dependent on Microsoft software, even as it steps up its antitrust pursuit of company that produces it; industry analysts estimate that in current fiscal year, Microsoft's Government sales will be about $380 million, up nearly 40 percent from previous year; part of push toward Microsoft involves company's office productivity and communications programs like its Word for word processing and its Excel spreadsheet, which in many Federal offices is replacing software from Wordperfect and Lotus; biggest move involves sales of Microsoft's industrial-strength operating system, Windows NT, which is becoming more and more popular in corporate America; Justice Dept insists that its antitrust confrontation with Microsoft is not meant to hobble company but to protect competition and innovation in software industry; says if Microsoft succeeds not through unfair advantages but by offering best product for best price, then modern antitrust policy is working as it should (M)

Chocolate manufacturers and environmental groups are seeking strategies for sustainable cocoa farming to prevent chocolate shortage expected in as soon as five to ten years; researchers say sustainability will require shift from large plantations carved out of rain forests to small farms where cacao trees are grown in shade of larger trees; little is known about how best to grow trees; graphs (M)

Talks on Afghan Strife Fail Negotiations to end the Afghan conflict have been suspended ''indefinitely,'' a U.N. representative said after discussions ended. Page A5. A Plan to Revive Barneys Creditors of Barneys New York are expected to offer a plan to bring it out of bankruptcy proceedings as an independent company. Page B3. Photo Archive Founder Dies Otto L. Bettmann, the founder of an archive of pictorial material that percolated into American culture, is dead at 94. Page A17.

For a Republican mayor, Rudolph W. Giuliani has maintained surprisingly good relations with labor, even gaining the endorsement of the citywide labor federation last year, but those relations have entered a rough patch in recent weeks. The immediate cause for this souring was the city's decision to lay off 905 workers at city-owned hospitals -- a move that labor leaders saw as a sharp reversal of Mr. Giuliani's practice of largely shunning layoffs during his first four years in office.

Anthony Tommasini reviews Kirov Opera presentation of Tchaikovsky's Mazeppa at Kirov Opera Festival presented by Metropolitan Opera; photo (M)