AT THE entrance to the world’s newest record shop, there is a picture of a Gibson guitar and a sign that reads: “Rock and roll will never die. It is, however, being reborn.”

Its owners claim that the shop, which is available only online, will revolutionise the music business and put an end to internet piracy.

Unlike most other internet music sites, it is legal, because fans have to pay 99 cents (65p) to download a song.

The site, called the iTunes Music Store, is operated by Apple, the American company that made computers look sexy and reinvented the Walkman with its digital alternative, the iPod.

Music executives, artists and fans hope that the online shop, billed as the most simple way of buying songs on the internet so far, will help to end the downturn in the global record industry, which saw sales of singles slump by 16 per cent last year.

Illegal online swapping of songs is costing record companies an estimated £5 billion a year in lost revenues. And, although the record industry succeeded in shutting down Napster, the first internet site to promote illegal song-swapping, it has failed to get rid of the next generation of music-sharing services, such as Kazaa and Morpheus.

These services won a big court victory last Friday when a judge in the United States refused to close them down and said that they were doing no more harm than the makers of video recorders.

Even fans, however, many of whom complain about the high price of CDs, are growing frustrated with online song-swapping services such as Morpheus.

The services are often slow, riddled with viruses and can dump annoying material on to users’ computers. Some computer-savvy artists even fill the sites with bogus versions of their own songs to annoy fans who refuse to buy them. Those who thought they were downloading Madonna’s latest single, for example, instead received a curt message from the singer.

The big five record companies have been criticised for spending more time trying to shut down illegal online song-swapping services than concentrating on providing customers with a legal alternative. Record companies have backed services such as MusicNet and pressplay, which give fans a limited number of downloads in return for a monthly subscription and with many conditions attached.

But these have received a muted response from consumers. A US Justice Department investigation into whether such services are anti-competitive has not helped.

Meanwhile, record companies have started to bring multibillion-dollar lawsuits against individuals accused of illegally swapping songs.

Earlier this month a lawsuit that claimed £100,000 for each song illegally shared was filed against four American college students who allegedly used their campus computer network to commit their crime.

The record companies said the students were liable for hundreds of billions in damages, a claim that has infuriated many students, who are the people record companies need to get on their side.

Apple hopes that iTunes will win over consumers with the same simplicity that has made its computers popular with design purists. Fans log on to the site, enter their credit card details and download a song on to their computers. Songs can then be burnt on to blank CDs using equipment that is standard on most home computers. iTunes has a selection of about 200,000 songs, including works by U2, Bob Dylan, Fleetwood Mac, Eminem and Jay-Z. Apple said that more songs would become available shortly.

The service, currently available only in the United States but expected soon in Europe, differs from most rival online music services, such as MusicNet and pressplay, because it does not offer monthly subscriptions.

Instead, fans simply pay for the music they want, when they want it.

Steve Jobs, Apple’s founder, believes that he thinks the shop may be the first real alternative to the illegal downloading of music.

“Consumers don’t want to be treated like criminals and artists don’t want their valuable work stolen,” he said. “The iTunes Music Store offers a groundbreaking solution for both.”

Mr Jobs says the service will be available only to Apple users this year. A Windows-based service should be available next year.

Rival executives are sceptical. They argue that record companies may be reluctant to give Apple the copyright agreements necessary to offer more songs online for 99 cents each, but admit that Mr Jobs’s timing is spectacular: similar services from the supermarket giant Wal-Mart (which owns Asda in Britain) and the online bookseller Amazon.com are expected overduring the next few months.

They also said that Apple has previously struggled to sell its products to a mass market.

The iPod, however, is an exception. The tiny digital device is beloved by fashion-setting pop stars such as Moby and already has 50 per cent of the portable jukebox market, according to IDC market research.

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