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The BPI's second quarter market report shows that download formats now account for half of all singles sales, and together, single track downloads and bundles combined to more than compensate for declining physical format sales.

A total of 16.7m singles were sold in the quarter, and weekly digital sales are now close to the million mark. So far this year 24.3 million tracks have already been downloaded, just two million short of the total for the whole of 2005.

'The British record industry is providing music fans with a great range of new and exciting

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acts while the expanding digital music market is giving them an enormous choice as to where, when and how they buy their music,' said BPI chairman Peter Jamieson

'Record companies' enthusiastic embrace of new digital formats has helped the single find a new lease of life, and the British singles chart is more exciting than it has been for years,' he said.

Digital single sales appear to be having a positive effect on physical album sales, with the industry enjoying its best-ever second quarter. More than 600,000 digital albums sold, almost two per cent of the total.

Across the Atlantic, physical sales have dipped somewhat, falling 4.2 per cent in the first half of the year according to Nielsen SoundScan, although much of that can be attributed to the lack of high-profile releases according to US charts compiler Billboard.

By contrast US downloads increased by 77 per cent, fuelling a 23 per cent increase in overall sales of albums, singles, music videos and digital music.