Apple has roundly denied reports that it plans to set up for business in the Channel Islands.

A statement from an Apple representative received by Macworld this morning: "This report is not true", adding that the original report which was carried in the Daily Telegraph was "completely wrong".

Apple is looking into some activity in the islands, it confirmed, but the Telegraph report missed the mark: "In order to provide an optimum service quality to our customers, we are evaluating the need for a Channel Islands Apple Online store. In the meantime, customers continue to be able to purchase Apple products from our network of local resellers," the company explained.

It had been claimed that Apple aimed to set move some of its business to the Channel Islands to benefit from local tax breaks there. It seems it is looking to launch a dedicated store in the area in order to avoid complaints from customers who live there who are charged VAT on goods they buy from the UK.

Basing its music business there would enable Apple to sell music VAT-free to British consumers, the Telegraph had said.