AGENCIES that collect royalties on behalf of musicians have rejected a multibillion-pound offer from record companies to govern the legal download of music across Europe, The Times has learnt.

The record industry is expected to learn today that royalty collection societies across the region want more time to negotiate a flat rate to cover legal music downloads as well as sales of CDs and DVDs.

The rebuff will push back the long-awaited launch by companies such as Apple and Sony of legal music download services across the Continent.

Instead, the companies are being forced to develop services on a country-by-country basis, with Apple expected to launch iTunes in the UK next week, followed by Sony Connect later this month.

It is understood that the music companies offered the agencies a flat 8 per cent royalty fee for every song downloaded legally within Europe. The rate would also cover the sale of CDs and DVDs.

Sources close to the collection societies said that they were not yet prepared to strike a treaty on music downloads without further negotiation with the record companies.

Universal Music Group and EMI are among the groups that have offered the terms of the proposed treaty. The new offer compares with the existing royalty payment of 9 per cent for sales of CDs in Europe and 8.5 per cent in the UK, and the pan-regional rate of 6 per cent for DVDs.

A source amiliar withclose to the situation said: “Throughout all negotiations between record companies and the collection societies it has always been the artists that backed down and took a lower rate.There is always a situation where you decide not to let that happen again.”

• Sony and Bertelsmann yesterday denied collusion over pricing exists among the major record companies and told the European Commission that merging their recorded music units in a deal worth €5 billionwould be good for consumers. The Commission will hold a hearing in Brussels to discuss the merger next week.

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