REDWOOD SHORES, Calif. (

TheStreet

) --

Oracle

(ORCL) - Get Report

has denied a rumor that it is willing to make a major concession to European regulators in its

controversial

attempt to

acquire

Sun

(JAVA)

.

Citing two unnamed sources,

The New York Post

reports that Oracle CEO Larry Ellison is willing to create a separate unit, post merger, that would encompass Sun's contentious

MySQL database

technology. Although unlikely to be a spinoff, the unit could have a separate board, the report said.

Oracle spokeswoman Deborah Hellinger, however, described the story as "completely untrue" in an email to

TheStreet

, and it seems that the company is still willing to play hardball with the European Commission.

E.C. officials recently issued a formal

objection

to the

deal

as regulators voiced their

concern

about Oracle

obtaining

MySQL, which has strong links to the open source community.

MySQL

, which competes with

Microsoft's

(MSFT) - Get Report

SQL and

IBM's

(IBM) - Get Report

DB2, is one of Sun's core technologies. Many free software programs like WordPress use MySQL, and the E.C. is worried about behemoth Oracle controlling such a key open-source technology.

This prompted a

war of words

between Oracle and the

E.C.

, with both sides

trading barbs

. Not one to step down from a challenge, Ellison clearly thinks that his firm can swallow Sun whole. In a statement released last month, Oracle vowed to oppose the E.C. and said that it was confident of its ability to clinch "unconditional clearance."

E.C. officials recently

extended

the deadline for their antitrust review of the $7.4 billion deal by one week to Jan. 27, although news reports say that Oracle will meet with European regulators on Dec. 10 to make their case.

Oracle originally hoped to close the deal, which was approved by the

DoJ

and Sun shareholders, sometime during the summer.

The drawn-out purchase has been particularly problematic for Sun, which recently announced plans to cut

3,000 jobs

. In a filing with the

Securities and Exchange Commission

, Sun says its hand was forced by the delay in closing the deal.

Ellison has also

complained

that the E.C. probe is costing Sun $100 million a month.

Oracle shares crept up 6 cents, or 0.27%, to $22.70 in Friday trading as the Nasdaq rose a modest 0.61%. Sun's stock also headed northward, gaining 20 cents, or 2.43%, to reach $8.43.

-- Reported by James Rogers in New York