Amazon's new store, which is understood to include loss-leading promotions, appeared on its website overnight with no pre-launch publicity, substantially undercutting the prices of Apple.
The Amazon shop's lowest price of 59p per song is 20p less than Apple's iTunes's offers. The current number one album in the music charts, The Circus, by Take That, is being sold for £3 by Amazon and £8.99 by Apple.
However, in a sign that Apple may have known about the launch, the US computing giant made a selection of popular albums, including Fleet Foxes, Coldplay and Oasis, available for just £4 for a limited period only.
Sources from the music industry said it was a "reasonable assumption" that Amazon's service was a loss-leading venture similar to its American store launched last year.
"I don't want to get into the economics of it, but we want to encourage our customers to get into MP3 who have never downloaded music before," said Damian Peachey, an Amazon spokesman.