Europe's largest independent record company, edel, has signed with Napster and Bertelsmann to allow its music to be traded through Napster's fee-based service.

Germany's edel will allow Napster to redistribute its catalogue, which includes rap group Pharcyde and dance singer Blumchen, and to promote some of its artists on its existing free service. The label has also pledged to help recruit other record companies for Napster.

In addition, selected edel artists will be promoted through Napster's Feature Music Programme, which helps the Napster user community discover new music and artists. The programme begins next month.

Michael Haentjes, chief executive at edel, said: "This is a very logical step for a company like ours. We have embraced the internet and welcome Napster's commitment to protect the interests of artists, songwriters and other rights holders through their new business model."

He added that the company will support any activity that provides fair compensation for everyone involved. "This agreement makes clear that edel is at the forefront of new technologies and innovative marketing," he said. The agreement between edel and Napster takes effect immediately.

The alliance follows Napster's October deal with Bertelsmann, in which both companies agreed to maintain some version of Napster's current file-swapping service while adding a fee-based membership component that would allow some compensation for artists and record labels. In a move that might deter some of Napster's 38 million users, the music download company said it would begin imposing a charge of about $4.95 per month for access to legal MP3 files.

Bertlesmann's record label, BMG, which was one of the major US record companies that sued Napster for alleged copyright infringement, has agreed to withdraw its lawsuit once the subscription service is up and running. Edel is the second record company to sign to Napster following BMG.