A spokeswoman for Deconstruction said the parting was a mutual decision and added: "It has been discussed for the past few months."

The 30-year-old actress and singer's last album, called Kylie Minogue, sold just 18,000 copies in the first two weeks and just 47,000 in total - the latest in a line of flops. It spent just one week in the UK Top 20.

Minogue, who played Charlene in Australian soap Neighbours, has been shooting a film in her homeland

Only last month she hinted at a move back into acting.

"I'm taking a few months to take my baby steps back into films again. It's been a long time before I considered getting back into films."

Deconstruction's spokeswoman said the decision "became inevitable towards the end" and was made official last week, ending Kylie's six-year relationship with the company.

A statement released by Deconstruction said: "Kylie Minogue and Deconstruction recently reached an amicable agreement not to record another album together.

"Kylie is currently in discussions with several record companies, including Mushroom who she releases through in Australia, for her next album, due in 1999."

Minogue had a string of hits in the late 80s and early 90s following her first No 1, I Should Be So Lucky, but said earlier this year that she would not continue to make records if she had lost her musical appeal.

Her first album, Kylie, released 10 years ago, sold two million and during the 80s she sold more than 30 million records.