SEATTLE (Reuters) - Microsoft Corp will authorize a proxy battle for Yahoo Inc this week to convince the Web company's shareholders to agree on a takeover deal that the Yahoo board so far has rejected, the New York Times' DealBook blog said on Tuesday.

Quoting people briefed on the matter, the Times Web site said that Microsoft, which has been expected to raise its cash-and-stock bid originally worth $44.6 billion, would seek to nominate a slate of directors by March 13, if Yahoo's board did not enter talks.

A Microsoft spokesman said the company had always maintained it reserves the right to exercise all options but declined to comment specifically on the DealBook report.

A person familiar with the matter told Reuters a proxy fight would cost about $20 million to $30 million but was not aware of the company making the decision to pursue the fight.

Chairman Bill Gates told Reuters on Monday that there was "nothing new" in the Yahoo takeover process. "We've sent our letter and we've reinforced that we consider that it's a very fair offer," he said.

The offer currently is worth $41.9 billion.

Microsoft shares rose 1 percent to $28.61 and Yahoo dropped about 1.5 percent to $29.22.

(Reporting by Peter Henderson, Daisuke Wakabayashi, Megan Davies; Editing by Tim Dobbyn)

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