Napster has just launched a new, legal test version

Anthony J Schaller, vice-president of technology at RioPort, which runs PulseOne, said its service would comply to legal requirements.

"This technology meets the requirements of both the content rights holder as well as provides consumers with much-desired music portability," he said.

"We are confident that we will gain major industry support for this initiative."

BMG is one of the world's biggest record companies, with more than 200 record labels in 42 countries.

The company is behind some of the biggest music acts including Whitney Houston, Dido and Westlife.

The music download industry is still relatively new with an uncertain future.

It is not yet known how many music fans will be willing to pay for music downloaded over the internet after the success of underground, free services like Napster.

Peter Gabriel has linked up with Microsoft

The RioPort announcement comes just days after Peter Gabriel's online music distribution company OD2 signed a deal to supply music from some of the world's biggest artists to users of Microsoft's UK website.

OD2 is one of the UK's most successful internet music companies and the deal will see songs by artists including Dido, Santana, Craig David and Phil Collins available to buy online through MSN.co.uk from February.

OD2 has also announced that it is to provide the world's first music downloads by Wap phone in a scheme to launch in France.

In the Microsoft deal, users will get access to the catalogues of record companies including BMG, EMI, Warner and hundreds of independent labels, who have struck partnerships with OD2.