British music fans are being warned against downloading "bargain" music from AllofMP3.com because the site has been deemed illegal.

The Moscow-based site offers albums for download for as little as £1, and individual tracks, sold by the megabyte, for only 4p compared with about 80p on most sites.

But the company behind the site is only able to offer the discounts because it does not pay royalties to the artists or the record companies.

A statement on the AllofMP3.com site claims that it can legally sell to any user based in Russia, and warns foreign users to verify the legality in their countries for themselves.

"There is no doubt that it is totally illegal," said a spokesman from the British Phonographic Industry.

"It is illegal to sell the recordings in Russia or anywhere else because they are not licensed, and UK consumers are infringing copyright law because they are making illegal copies from an unlicensed source."

AllofMP3.com is said to have found a loophole in Russia's copyright laws, and claims that it is licensed by the Russian Multimedia and Internet Society and the Rightholders Federation for Collective Copyright Management of Works Used Interactively.

But the International Federation of the Phonographic Industry insisted that the Russian Multimedia and Internet Society licence is not legitimate and would not in any case cover consumers in other countries.

Russian Multimedia and Internet Society was apparently expelled by the International Confederation of Societies of Authors and Composers in 2004.

Consumers are flocking to the site, however. A survey in March by XTN Data ranked AllofMP3.com second to Apple's iTunes in popularity the UK.