Universal Music has reportedly declined to reach a long-term deal to sell its music and videos through iTunes.

While the company has agreed a short-term deal, the move leaves the very real possibility that Universal may withdraw its content and artists from iTunes in future, warns Reuters.

Universal is only agreeing to a month-by-month deal rather than the Apple-favoured two-year deal. A previous three-year deal expired last month.

The move by the world's largest record label has set tongues wagging. Many commentators feel that with the relative weakness of other digital music stores the decision by Universal to try to weaken iTunes through the withdrawal of its content would also negatively impact Universal's artists.

As well as attempting to weaken iTunes' dominant position in online music retail, Universal may also be attempting to force Apple into offering the company flexible pricing.

Universal may also be fantasising at the possibility of taking a royalty on each iPod sold, similar to the deal the company reached with Microsoft over the Zune player.