MICROSOFT yesterday ruled out launching an internet music store across Europe in competition with services such as iTunes and Napster, despite secretly developing a US download service for launch later this year.

The giant software company said that, rather than attempt to break into the market with its own service, it was content to run a low-key internet music store through a partnership between MSN, its internet division, and Britain’s On Demand Distribution (OD2).

Geoff Sutton, the regional general manager of MSN, said that the service would not be promoted outside Microsoft’s own internet network. He said that apart from MSN branding, the service would be no different from several other music sites powered by OD2.

The news will provide a boost to music download services such as Napster, Sony Connect and Apple’s iTunes, which have long feared a major move into music downloads by Microsoft. It will also come as a surprise because Microsoft is thought to covet a share of the online music market that is dominated by iTunes in America.

The company, maker of the Windows operating system, has cash reserves of more than $55 billion (£30 billion) and has been expected to make an aggressive push into music.

“We’re very interested in music; it’s a large area of interest,” Mr Sutton said.

“In the US we’re looking at doing our own music platform but here we’re happy to partner.”

The European market remains in its infancy, with Napster launching only last month and Sony Connect expected to be unveiled by the end of this month. Steve Jobs, the chief executive of Apple, is today expected to launch the long-awaited UK version of the iTunes service in London.

OD2 is the only company that sells music over the internet in all Europe’s major markets, including France and Germany.