The owner of QTrax has been forced into an embarrassing climb-down over plans to launch a 'free' music download service.

The company held a £500,000 launch party at the Midem music conference in Cannes, featuring James Blunt, Don Henley of the Eagles and LL Cool J.

However, QTrax has now admitted that it has yet to sign any of the big four music labels for a free download service.

Sony BMG, Warner Music, EMI Group and Universal Music have all denied signing any deals with the site.

QTrax has said that it had no intention of misleading fans over its promise of 25 million free tracks, but that the "ink had not dried" on its deals.

While some of the majors have admitted to being in discussions with QTrax, none has struck a deal.

"We are not idiots. We would not have launched the service in front of the whole music industry unless we had secured its backing," Qtrax chief executive Alan Klepfisz told The Times.

"We feel we have been unfairly crucified because a competitor tried to damage us. Everyone is very upset."

Nevertheless doubts remain about the QTrax business plan. The company is building a download engine that would supply songs for free but expose users to advertising and check what songs were played most frequently.

This frequency checking is also carried out when the user docks their media player, although the software is not compatible with Apple's iPod.

QTrax claimed that it expects to have the problems resolved by April.