EMI has also taken a 50% equity stake in musicmaker.com.

George Michael: EMI asset

The deal means thousands of tracks by top recording artists could be added to musicmaker.com's existing catalogue of more than 150,000 songs, creating the world's biggest library of individual tracks for custom compilation.

Customers put together their own selection from its catalogue to create CDs of their choice.

With the addition of the EMI stable, songs by artists such as George Michael, Robbie Williams and the Spice Girls could become available, along with older favourites from bands such as the Rolling Stones and the Beatles.

Beatles: EMI golden oldies

The deal also means EMI will have an outlet for its own compilations via a secure digital downloading system once an industry standard has been agreed, which is expected later this year.

The President of EMI Recorded Music, Ken Berry, said the company was "well-positioned to take advantage of the great opportunity that the Internet will bring, and this is one of our first steps in the new media area."

Another spokesman, Jay Samit, said: "This is an opportunity for EMI to generate additional income from its extensive back-catalogue."

The chairman of musicmaker.com, Bob Bernardi, said the key to unlocking the emerging market for downloading music from the Internet was a secure and copyright-protected distribution system that was easy to use.

EMI said in May that it was looking to boost flagging profits by exploiting the potential of the market on the Internet.

The company's recent weak performance has prompted takeover speculation. On Thursday, its share price was bolstered by continuing reports of interest from Rupert Murdoch's News International.