Virgin Media is thought to be joining forces with music-streaming service Spotify.

According to The Telegraph, the ISP is close to agreeing a deal with Spotify after its own streaming service, which was first outlined in summer 2009, failed to get off the ground.

Although Universal Music signed up to the service, it is thought "tough" negotiations with the remaining three major record labels were responsible for stalling the launch of MusicFish, which was expected to offer streaming and downloads, with Virgin customers being offered free content.

One senior music figure told The Telegraph: "Virgin Media has built its own service, and it's really good. But it has yet to sign up any of the other major three record labels, so it can't launch for at least 12 to 18 months."

Meanwhile, a source close to Spotify said the companies "are close to concluding a partnership deal".

The source added that while the finer details are not yet known, Spotify will be offering new tools and content exclusively to Virgin customers as part of the arrangement.

"Virgin Media is forging new ground in music and whilst we are currently in talks with numerous parties, we want to ensure that any service provides a truly compelling offering for both consumers and the industry," the ISP said.

Spotify admitted it was in talks with "a range of internet service providers", but said no deals were in place.