The slump follows a 5% drop in 2001.

The UK escaped the bad news in 2001 - but has seen a 6% drop in the first six months of 2002.

The biggest market in the world, the United States, fell by almost 7%, while the second biggest, Japan, dropped 14%.

Music piracy has long been blamed for declining sales.

It has been identified as "the greatest threat facing the music industry today" by the IFPI.

Internet sites offering copied songs for free are still attracting millions of users despite the fall of Napster, while copying onto recordable discs, CD-Rs, is on the increase.

" There is no doubt that the music on which our business depends is more in demand than ever "
Jay Berman
IFPI

But others say the activities are only as harmful as tape-to-tape copying in the 1980s, and that downloading free songs allows fans to decide whether they want to buy the album.

IFPI chairman Jay Berman said the figures were disappointing, but not unexpected.

"The industry is in transition, with widespread CD-R copying and internet downloading continuing to affect sales."

There was "no doubt" that music was more in demand than ever, he said.

"It is encouraging that our member companies appear to have an exceptionally strong release schedule in the second half of the year."

The record industry is taking "positive steps" to provide legitimate, consumer-friendly online services to counter the threat of the pirates, he added.