Disney is to stream full-length movies on its website in an attempt to generate more traffic and stave off competition.

The entertainment company also plans to offer new mobile services. Among them will be a tool that lets young people create virtual characters known as avatars which they can control with their phones, according to The New York Times.

It will be the second time in 18 months that the Disney website has been redesigned, reflecting the increased competition that the site - still the top destination for children's entertainment on the internet - faces from the likes of Nickelodeon, Cartoon Network and Webkinz.

"It's a repositioning of our digital front door," Paul Yanover, executive vice president and managing director of Disney Online was quoted as saying.

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As part of the redesign, Disney will try to gain allegiance from its audience by allowing them to interact with the site using mobile phones - for instance by creating pet butterflies for characters that they adopt in a virtual world called Pixie Hollow.

The revamped site will also have a greater emphasis on video, and is said to have borrowed heavily from the layout of YouTube, with which they say the Disney audience is familiar. One full-length movie will be streamed on the site every week, Disney said.

Previous categories such as Movies, TV and Events will be replaced by new offerings such as Games, Videos and Characters, in what Disney said would emphasise a sense of immediate entertainment. A senior executive said that the company hoped the new services would allow the audience to "invest emotionally" in the site.

The latest makeover follows a similar refit in January last year, and shows the rapid pace of development in the world of online children's entertainment. Last year, Disney paid $700 million to acquire Club Penguin, an arctic-themed virtual world for "tweens" which is used by 750,000 children in the UK alone.

According to comScore, Disney.com attracted 28.4 million visitors in May, making it the leading children's site, but the company said it wanted to do more to entice users to stay longer.

The average visitor to Disney.com stayed 44.9 minutes, whereas on Nickelodeon-owned sites, they stayed for an average of 79.8 minutes, comScore figures suggest.

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