Branson in surprise bid for Robbie Williams

Sir Richard Branson's V2 record label has emerged as one of the leading contenders to sign Robbie Williams, whose contract with EMI ended in February.

Sir Richard's five-year-old label is battling it out with the world's largest music groups to sign the singer.

Final bids must be submitted in the next two weeks with a deal expected to be announced in September.

EMI is desperate to retain Williams who has been one of its best acts with a string of hit albums such as Sing When You're Winning and Life Thru a Lens. The British company has been in crisis as a result of a declining music market and disastrous chart flops. These include Mariah Carey to whom the company paid £38m earlier this year to sever her contract after the failure of her Glitter album. Losing Williams would be a huge blow to the struggling group which earlier this year announced 1,800 job cuts alongside a radical overhaul of its business as it attempts to cut costs and put money behind fresh talent.

Sir Richard's label, whose artists include Tom Jones, Moby and Stereophonics, is competing against far bigger rivals such as Sony, Warner Brothers and Universal. Also in the hunt is Dreamworks, the US group set up by media heavyweights David Geffen and Stephen Spielberg. "Sir Richard understands exactly what we are trying to do," said one executive in the Robbie Williams negotiating team.

V2 is a surprise entrant into the battle which could see the Robbie Williams contract valued at £40m. It was only in April that Sir Richard refinanced the loss-making label with the help of the investment bank Morgan Stanley Dean Witter. The deal saw the bank take a 47.5 per cent stake in V2, valuing it at around £200m.

Williams is seeking a complicated deal that would give him greater control over areas such as video recordings and digital downloads.