Xbox 360 users are being denied the BBC iPlayer service via their consoles as Microsoft is refusing to budge on a payment point.

While the BBC wants the service to be available to as many licence fee payers as possible, it seems Microsoft only wants the iPlayer to be available to its paid-up Gold account members.

"Microsoft only wants to offer its users access to platforms it can charge for as this is the model it is pursuing. It wants to ensure that only those paying for Xbox Live Gold accounts can access its additional content services and even then there is usually a charge on top to get access to those. For example, to access the Sky Player on Xbox, you have to pay for a Gold subscription as well as a Sky subscription", The Telegraph quotes its "close to the BBC" source as saying.

Rival consoles the Nintendo Wii and the Sony PlayStation 3 already offer free access to the iPlayer.

A BBC spokesman said: "BBC iPlayer has been extremely successful on PS3 and we recently re-launched on Nintendo Wii, from which the public response has been fantastic. People clearly want the BBC iPlayer on their gaming consoles, and we don't think Xbox users are any different, so we've had discussions with Microsoft about bringing the service to the platform".

The Telegraph says the launch is delayed indefinitely - we will keep you posted.