Online file sharing site Napster has offered $1bn to the record industry in a bid to keep its controversial service open.
Napster officials have declared themselves willing to pay out $150m to major labels and $50m to smaller labels and independent artists every year for five years, in return for permission to share their music among Napster users.
The money will come from charging users of the site a subscription fee, which Napster is planning to introduce as early as July.
Last week the US courts upheld an earlier decision, dating from July 2000, which found that Napster's file sharing service infringed copyright law.
Similar offers from Napster have already been rejected by the recording industry. But Napster hopes the new offer, with payments linked to the number of files downloaded, may find more favour with record company executives.
The Recording Industry Association of America (RIAA), which has been pursuing Napster in the courts on behalf of the US recording industry, attacked the decision, accusing Napster of 'delaying tactics'. The RIAA has called for free file sharing to be suspended until a fee-based model can be put in place.