MySpace, the world’s largest social networking group, has announced plans to set up a music downloading service to rival Apple’s iTunes.

Three of the “big four” record labels have signed up to the service, which will give users access to the music of big artists such as Amy Winehouse and Led Zeppelin. With MySpace’s 30 million users a month, it is viewed as an ideal hub to showcase new music.

MySpace is credited for launching the careers of a number of artists who would not have had access to recording labels.

Adele Adkins was spotted from songs she had posted on her MySpace page and was then invited to perform on BBC Two’s Later . . . with Jools Holland.

The website, owned by News Corporation, the parent company of The Times, also gave the 20-year-old Londoner Kate Nash a head start following a MySpace recommendation by fellow female singer Lily Allen. Her debut album, Made of Bricks, soon went to the top of the UK sales chart.

“MySpace will be able to cash in on its vast community of loyal users,” said one source close to the record labels. MySpace has more than 25 localised websites, in countries including, India, Brazil and Australia.

MySpace Music claims to be a one-stop-shop for users, offering what it calls a “360 degree global music solution”, selling music tracks as well as allowing users to listen to songs in their entirety and organise them into shareable playlists. The site will also sell ringtones, artist wallpaper, ticket sales and merchandise. There will also be a number of advertising-funded free services, from free downloads to video clips.

The online music store iTunes has sold more than four billion songs since its launch in 2001, and claims to be the No one music retailer in the US. However, iTunes users can only listen to song clips through the Apple store.

The record labels are understood to be committed to the MySpace venture for the long-term, all holding stakes in the new venture. EMI, the record label behind Kylie Minogue and Robbie Williams has, however, not yet signed up.

The launch comes as welcome news to the music industry, with many concerned about a lack of competition for iTunes in the digital music market. In the US, for example, iTunes takes takes more than 70 per cent of digital download sales. Concerned about Apple’s increasing influence over its business, the music industry has been keen to see other sizeable players.

“This is the first time we have seen a truly serious competitor to Apple’s iTunes,” said one music source.