Unmetered internet pioneer Paul Myers, who founded the X-stream service and sold it to LibertySurf this year, plans to challenge Napster with a 'legal' music file sharing system.

Described by Myers as a Napster which the recording industry will be happy with, Wippet will make payments to record companies in return for track downloads. Users will pay an annual fee for Wippet and will view a constant stream of adverts, as was the case with X-stream.

Myers said Wippet, which is expected to be launched by the new year, will give consumers cheaper access to music, while record companies will see an increase in volume of music reaching consumers.

"Record companies are under the impression that people are going to go to their website to download music. But that's not reality," he said.

Myers added that Wippet would let consumers be more selective about which tracks they chose. "People will be purchasing the songs they actually want, rather than what they're given as tracks 4,5 and 6 on an album."

For Wippet to work, Myers needs to win the support of major record labels. "So far the response from the record industry has been positive. It's a matter of everyone understanding."

Wippet will log every track downloaded by its users and make a payment to the appropriate record label. Record labels can also elect not to have their tracks shared on the system, so if a user attempts to download an unauthorised track, it will be blocked.

Myers hopes to convince record labels that using digital distribution will save them costs. He claimed packaging alone is about 40 per cent of retail cost.