Sky is dropping the £10 subscription charge for its Sky+ service for those customers who subscribe to one of its TV packages. 

The Sky+ service reached two million subscribers in January 2007, which means that the satellite broadcaster will be writing off at least £20m revenue a month, or £240m a year.

The move has prompted rival cable firm Virgin Media to react with what the company's chief operating officer, Neil Burkett, referred to as an "imminent" price change. 

Burkitt did not confirm whether the V+ subscription charge would be scrapped altogether or offered at a lower price.

Sky+ boxes work like regular Sky television receivers, but allow users to pause live TV and include an 80GB hard disk to record programmes.

"As of 1 July 2007, the Sky+ subscription charge of £10 will be removed for all Sky customers subscribed to any Sky package," said the online announcement by Sky.

"You will not have to pay a subscription charge for Sky+ after 1 July regardless of which Sky package you subscribe to or how long you've been a customer with us."

However, those customers who stop subscribing to a Sky package but wish to continue using all the features of Sky+ will see the £10 monthly subscription added to their bill again.

Sky HD customers, who pay £10 a month for the high definition channels, already have the Sky+ subscription charge waived. 

The move does not mean that Sky will be handing out free Sky+ boxes to new subscribers, and there will still be a one-off £99 charge for anyone choosing a 12-month subscription as well as a £30 installation charge.

"Many of you have said that you want Sky+, but that it needs to be more affordable," said a statement from Sky.

"We believe that removing the Sky+ subscription cost for Sky Digital customers will mean that more of you are able to enjoy the benefits of Sky+."