Virgin Megastores has launched a UK download site in conjunction with Mac user Peter Gabriel's OD2 network.

The launch comes as music companies report dwindling record sales, on the back of a 40 per cent dip in single sales from last year, according to Virgin.

The site is subscription-free and allows for individual track downloads, mirroring Apple's successful iTunes Music Store. Like Apple, it also allows customers to burn their music to CD. Apple yesterday announced that iTunes has now passed the 10-million downloads mark.

Virgin users can download songs for as little as 60p. Virgin is also offering customers the ability to listen to 30-second samples of more than 200,000 tracks, as well as offering access to exclusive content. Because it uses Microsoft's Windows Media 9 multimedia format, the service is currently unavailable to Mac users.

Virgin is touting its new service as being "the cheapest in Europe", and says that with the UK's high rate of computer use should promote quick uptake.

"Music fans are driving the demand for digital music, and now that the technology is there the industry is behind it. With the introduction of our service prices are affordable for all," said Virgin chairman Richard Branson.

Virgin is aiming to undercut Microsoft's MSN Music Club, a service that's accessible through Windows Media Player 9, and that offers songs for 75p.

Mark Mulligan, senior analyst with Jupiter Research in London, said: "Virgin's offering will not be too different from MSN and Tiscali's services, given that it is also powered by OD2's music catalogue, but pricing and exclusivity will help stimulate the online music market.

"These services are really beginning to put some life into the dwindling singles market. The online music market will really take off during the Christmas season, when retailers will offer discounted albums for download."