The music industry woke to a potential revolution today with the first downloads of Radiohead’s In Rainbows album being eagerly copied to MP3 players.

But the prospect of fans choosing how much, if anything to pay for a hotly-anticipated release, provoked a mixed response from the Oxford band’s peers.

James Blunt, the three million-selling singer songwriter told The Times that Radiohead’s approach could undermine the principle that artists should be rewarded for their work.

“I definitely think there is value in music,” he said. “I don’t think they should devalue it. I’ve got to pay a band and a producer and a mixer. I don’t know how I’d necessarily pay them if I sold my albums for 1p. I’d have to work it out, but maybe they know how this works in practice.”

Johnny Marr, the former Smiths guitarist, now a member of US cult band Modest Mouse, is an enthusiastic supporter. “I think it’s a really fantastic idea because it puts the responsibility back on people’s own consciences and deals with people as grown ups,” he said.

Bands will have to up their game, predicted Marr. “Everyone knows you can get your music for free, so let’s see if you really want to show the band your appreciation.”

Alex Turner, Arctic Monkeys’ singer, said he had been “reading up” about Radiohead’s exercise. He said it was “very interesting”, but would not commit his band, voted Best Act in the World Today by Q magazine readers this week, to following suit.

Artists such as David Bowie, a web pioneer who has one further album to deliver on his current record deal, are said to be taking a close interest in the Radiohead project.

Oasis are releasing their new single, Lord Don’t Slow Me Down, as a 99p download only. But the band are currently without a record deal and are discussing a new contract with corporate giants, including Universal Music.

Sources say Oasis want the international marketing power that a large record company can offer, and the one-off advance payment would be an incentive for some band members.

But Jamiroquai, another former Sony artist with a live following, is said to be interested in pursuing the web-only route because the band makes a large amount of its earnings from live performances.

Record companies are expected to fight back by cutting the advance payments they offer stars. Robbie Williams negotiated a record £80 million deal with EMI but the company, under new management, is likely to be less generous when negotiations begin shortly.

Manchester veterans The Charlatans announced that they are giving their new album away as a free download through the XFM website. The band argued that signing to a record company was similar to “joining the army” with a similar lack of financial reward. But the group, who sold out their latest tour within hour, have probably passed their recorded sales peak.

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