Highest weight modules over W_{1+infty} algebra and the bispectral problem

The present paper establishes a connection between the Lie algebra W_{1+infty} and the bispectral problem. We show that the manifolds of bispectral operators obtained by Darboux transformations on powers of Bessel operators are in one to one correspondence with the manifolds of tau-functions lying in the W_{1+infty}-modules M_beta introduced in our previous paper hep-th/9510211. An immediate corollary is that they are preserved by hierarchies of symmetries generated by subalgebras of W_{1+infty}. This paper is the last of a series of papers (hep-th/9510211, q-alg/9602010, q-alg/9602011) on the bispectral problem.