British customers will be able to buy films from Apple's iTunes website, in a move that is expected breathe new life into the digital download market.

From today, Britons will be able to download new release films from iTunes for £10.99 - about £1 more expensive than buying a DVD version on Amazon - and library titles for £6.99.

They can also rent both types of film, for £3.49 and £2.49 respectively. Rented films will be available for a month after download, but only 48 hours after being played, before vanishing from the computer. Apple's intention to launch the service was revealed last week in The Times.

It will premiere with 700 films for rental and purchase, including some from the largest Hollywood studios, such as 20th Century Fox, MGM, Disney, Paramount, Warner and Sony Pictures.

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A similar service was announced in the US four months ago.

Customers can watch the films on a PC, iPod or iPhone, as well as on TV, by connecting their computer to their TV with a cable. Owners of Apple Macs can also watch the film with a TV-style remote using Apple TV, a white box costing £199 that beams content wirelessly from the computer to the TV.

Apple's entry into the fledgling film download market in the UK is expected to give a jolt to existing services, which have had limited catalogues, been typically rental only, and charged relatively high prices.

LoveFiLM, best known for renting DVDs via the post, offers more than a thousand films for download, with some, such as American Gangster, costing as much as £13.99. Sky offers a rotating package of about 30 box-office films to rent for £3.99 per title. It does not have a download-to-own service.

BT offers recent releases, such as Al Gore's An Inconvenient Truth for £19.99, and Microsoft rents films that can watched via its Xbox games console for about £3.

Apple's initial catalogue of films - which includes National Treasure 2: Book of Secrets, the Abraham Lincoln-inspired action film, and the Sean Penn-directed Into The Wild, neither of which shone at the box office - suggests that it has not secured the rights to the most popular releases, which the studios still hope to exploit through DVD sales.

But the deals it has done - 700 films is more than half the number offered by LoveFiLM, the largest existing download-to-own library - will put significant pressure on competitors, mostly because of the immense power in the tie-up with its iPod devices, many of which play video content.

When the service was announced in the US, analysts said that even though downloads would compete directly with DVD sales, studios had been willing to embrace Apple's offering because of the company's wide reach with consumers. Offering films for downloads also enabled film companies to shed some of the costs associated with manufacturing and distribution, they said.

Significantly, Apple's service will not include HD films, suggesting that studios will still seek to convince owners of new Blu-ray devices, which play HD content, to buy films on disc.

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