Google has lost the right to the Gmail name in the UK after a protracted legal battle with Independent International Investment Research (IIIR) which has used the Gmail name since 2002, 2 years before Google launched its service.

From tomorrow all new users who sign up for the email service will get addresses ending in googlemail.co.uk rather than gmail.com but existing subscribers will keep their current email address.

"This company [IIIR] has been very focused on a monetary settlement", Google said in a statement. "We went back and forth trying to settle on reasonable terms, but the sums of money this company is demanding are exorbitant".

"Google asked us at one point what it would cost to make the problem go away", IIIR Chairman and Chief Executive Shane Smith told Reuters. "We had an independent valuation commission assess what the value of the trademark actually is, but we couldn't reach a settlement".

IIIR had been seeking a payment from Google in the region of £25mn to £35mn in exchange for allowing the search engine to use the Gmail name. However Google decided that it was not worth that much.

Last month IIIR won an injunction against Google in Germany where, as a result, it now uses the googlemail brand.