Tesco has paid £10.8m for a majority stake in an online music venture founded by Cheshire entrepreneur Steve Purdham and rock star Peter Gabriel.

The supermarket chain has acquired a 91 per cent stake in internet radio service WE7, which has a catalogue of 11 million songs that users can listen to for free, with advertisements played at the beginning of each track.

Tesco said it would buy the remaining shares within weeks.

The move follows Tesco's acquisition last year of online movie service blinkbox and is part of a strategy to offer new ways of accessing digital entertainment.

Mr Purdham was chief executive of SurfControl, a Congleton-based internet security company, until its sale for £201m in 2007.

He founded WE7 with £5m backing in 2008.

Mr Purdham said: “With its loyal customer base, numerous marketing channels and international reach, we believe Tesco is the perfect partner to bring WE7’s music services to a wider audience. Tesco has been an innovator in entertainment retailing for many years and we look forward to continuing this innovation digitally.”

The service is available via the internet and a smartphone app.

Tesco said it plans to launch additional digital music services from the WE7 platform in the coming months.

Tesco digital director Mark George said “Tesco is already one of the UK’s largest retailers of CDs. This move will help us offer a greater choice for the growing number of customers who want to access music instantly on any device, whenever and wherever they want.”