TL;DR
- Try to shrink the partition in the Windows Disk Management snap-in. Proceed to the step 2, if the shrink fails.
- Find the event with ID 259 in the Windows Event Log and see it's details.
- For even more details, optionally, run the fsutil command with the appropriate parameters given on step 2.
- Given the details from the steps 2 and 3, determine what component, program or feature is locking your partition.
- Temporarily disable or uninstall it.
- Go to the step 1.
Possible culprits: Virtual Memory, System Restore and/or Windows Search Index (System Volume Information folder), Hibernation, Internet Explorer temporary files.
Detailed version:
In the low-level tasks, like working with an HDD system partition, I prefer to use native tools as much as possible, and switch to third-party tools only as a last resort, if none of native tools worked. So, directed by harrymc, I gave Windows Disk Management another try.
I first turned Virtual Memory and System Restore off, removed System Volume Information folders, and after that Disk Management utility allowed me to shrink the C: partition as much as I needed. After that I turned the features back on.
The following instructions may help you to identify what application or component is preventing your partition to shrink. First you need to find the latest event with ID 259 in the Windows Event Log (see Event Viewer / Windows Logs / Application). The event is generated when the system analyses a partition, and if you have already tried to shrink a partition via right-clicking on it in the disk management snap-in, then the event should be there. Another way to make the system analyze a partition is to run the Windows built-in defragmentation utility. The event tells you the last unmovable file or just the number of the last cluster of such a file. It also tells you the complete command to run from the command line to get more details about the last unmovable file. (Alternatively, you can probably also try to calculate the cluster number as min allowed partition size divided by cluster size, and then run the fsutil command with the appropriate parameters).
The filename will give you a hint to guess, what program or feature is locking your partition. And then you can turn it off or uninstall, and see if it helped. In my case turning off Virtual Memory and System Restore was enough. Sometimes it is also necessary to turn off hibernation, etc. And sometimes partition defragmentation may also help. Also, as stated in the WindowsITPro article, Windows Search Index files and Internet Explorer temporary files can also be "unmovable". Sometimes just disabling the System Restore and Windows Search Index will automatically remove unmovable files from the System Volume Information folder, and sometimes you may need to remove the folder manually after that.
P.S.: Thanks everyone for answers. Probably third-party tools would also work in my case, and probably they are easier to use, but as I have already told, for such kind of tasks I prefer to use native tools as much as possible. Also, personal thanks to harrymc for the important hint.
I'm not sure what SYSTEM 300 MB is
The system partition contains the hardware-related files and the Boot folder that tell a computer where to look to start Windows.
By default, Windows 7 creates a separate system partition when it's installed from scratch (as opposed to upgraded from a previous version of Windows) on an unpartitioned hard drive. This partition is 100 MB in size.
Source What are system partitions and boot partitions?
It listed only 2777 MB as available shrink space
I'm puzzled, what's causing this and how do I shrink more memory?"**
The answer is right there in the image you posted.
"You cannot shrink a volume beyond the point where any unmovable files
are located. See the "defrag" event in the Application log for
detailed information about the operation when it has completed."
"See 'Shrink a Basic Volume' in Disk Management help for more
information."
Shrink a Basic Volume
The shrink operation can be blocked by the presence of certain file types; see Additional considerations for more information.
...
Additional considerations
When you shrink a partition, certain files (for example, the paging file or the shadow copy storage area) cannot be automatically
relocated and you cannot decrease the allocated space beyond the point
where the unmovable files are located. If the shrink operation fails,
check the Application Log for Event 259, which will identify the
unmovable file. If you know the cluster or clusters associated with
the file that is preventing the shrink operation, you can also use the
fsutil command at a command prompt (type fsutil volume querycluster /?
for usage). When you provide the querycluster parameter, the command
output will identify the unmovable file that is preventing the shrink
operation from succeeding.
In some cases, you can relocate the file temporarily. For example, if the unmovable file is the paging file, you can use Control
Panel to move it to another disk, shrink the volume, and then move the
page file back to the disk.
If the number of bad clusters detected by dynamic bad-cluster remapping is too high, you cannot shrink the partition. If this
occurs, you should consider moving the data and replacing the disk.
Do not use a block-level copy to transfer the data. This will also copy the bad sector table and the new disk will treat the same
sectors as bad even though they are normal.
You can shrink primary partitions and logical drives on raw partitions (those without a file system) or partitions using the NTFS
file system.
Source Shrink a Basic Volume
Best Answer
The reason why Windows won’t let you shrink the volume is because there are immovable system files at the very end of the volume. The immovable file is actually the MFT, or Master File Table for the volume. In other words, because it's a system partition.
I suggest to use this program AOMEI Partition Assistant Standard Edition, it's free and simple to use. It will do all you want in a restart.So, setup it in the normal windows interface, open it and do what you have to do, then restart and follow the instructions on the screen.