Music lovers can download their favourite tracks from the Internet for free, thanks to a pioneering Oxford firm.

We7, based at the Oxford Business Park, allows people to download as many songs as they want from its website, meaning they can avoid the charge normally levied on sites such as Apple's iTunes.

But the artists will not be short-changed - they will receive royalties thanks to We7's scheme which means each track is preceded by a 10-second advertisement.

Chief technology officer Gareth Reakes said: "We have got about 150,000 tracks on the site and it is going from strength to strength.

"It means music can be downloaded free without having to use illegal sites and the artists still get paid."

We7 has so far attracted £1.6m of venture capital and was recently selected as one of 24 finalists in the English Tech Tour, a contest to match promising young technology firms with investors' cash.

Former Genesis front man Peter Gabriel has also backed the company.

The firm is looking to get major record labels to add their artists and catalogues, with the UK's largest independent label, Sanctuary, already on board.

Another feature of the website is that unsigned bands will be able to upload their music. They will be paid royalties in the same way as established artists.

Mr Reakes added: "Peter Gabriel is very keen to find new ways of helping people wanting to get into the music business and there are already more than 2,000 artists in the system.

"We have had more than 50 artists upload in the last week."

Mr Reakes, 31, an information technology graduate of Oxford Brookes University, believes We7 will be part of a rapidly changing music industry which has already seen bands such as Oxford's Radiohead offering their latest album as a download from as little as 1p.

He said: "No-one has done this before, so we have to prove it works by attracting advertising."

The first major advert is for Michael Moore's film, Sicko, launched this week - and there are others in the pipeline.