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The executive, who was not named, told the Financial Times that the service would 'compete against cable companies and anyone else offering VOD [video on demand] into the home'.

It also likely

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to prove more popular with studios than selling movies through iTunes has been. Just two, Walt Disney and Paramount, have signed up; the refuseniks are said to be concerned about the potential impact on DVD sales. But rentals are not expected to hit those retail earnings.

According to the report, on which Apple declined to comment, a movie would cost $2.99 for a 30-day rental and could be copied to one other device, such as an iPod, iPhone or Apple TV.

Hollywood joined Apple in declining to comment, though the FT says that privately they are excited about the service, which is expected to launch in the autumn.

Piper Jaffray analyst said last month that he expected iTunes video rentals some time in 2008, but did not elaborate.

However there remains no inkling of when, or even if, Apple will start selling movies outside the US.