Samsung Galaxy Note 7 permanently discontinued after fears it will blow up while people use it

The company had looked to calm the scandal by offering replacements – but those replacements also kept blowing up

Samsung will permanently stop selling its new flagship phone amid fears that it could blow up, it has said.

The company has already sold millions of the new handset and has already launched a programme to have those dangerous handsets recalled. It has also told owners that if they own a phone they should be switched off straight away.

It had previously said that it was pausing operations on the new handset to try and find the cause of the mysterious explosions. It will now stop selling them entirely, it said.

It had hoped to bring an end to the crisis by offering people replacement phones that didn't have what appeared to be defective batteries. But those replacement models then kept exploding – and the company and its regulators appeared not to know what was leading them to explode.

Samsung insisted at the time that it was making production adjustments to improve inspections and quality control. But it has finally relented and said in a regulatory filing that no more of the phones would be made or sold.

“Taking our customer’s safety as our highest priority, we have decided to halt sales and production of the Galaxy Note 7,” it said in a filing in South Korea. Local media reported that Samsung's factories have already been instructed to stop making the device.

In another press statement, the Korean firm said: “We can confirm the report that Samsung permanently discontinues the production of Galaxy Note7.”

The problems initially appeared to have a limited effect on Samsung's share price, with investors appearing to believe that the problem could be fixed. But when the company said that it was pausing operations and that the cause of the explosion was a mystery, its value began to plummet and it lost as much as $19bn (£15.4bn) in value.

It is still unclear what will happen to phones that have already been bought, since millions of them have already been sold. Owners have been advised to contact the provider or operator they bought the phone from, and experts suggest that those companies should offer loan devices until they are replaced.

Some people are also being asked if they want to swap their phone for a Samsung Galaxy S7 or S7 Edge – two of Samsung's other phones, which don't have the same tendency to burst into flames.

But some analysts have suggested that many of those sales will instead go to Apple and Google, both of which have announced new phones of their own in recent weeks.

"As a result of making a complete mess of the Galaxy Note7 recall,Samsung is more likely to lose a large number of high end users to other Android handsets rather than to Apple," said Richard Windsor, from Edison Investment Research.

"The real issue is brand and reputation. As long as Samsung carried out the recall smoothly and kept users very happy, the issue would eventually blow over. Unfortunately, this is very far from the case, and the fact that Samsung appeared to still be shipping defective devices could trigger a large loss of faith in Samsung products."