Apple is expected to launch a radio app for its iPhone and iPod touch, allowing users to tune into their favourite radio stations on the Internet.

The rumour, which this time comes from sources talking to, will be a radio app that "will be allowed to operate in the background like and will offer the same functionality as the FM radio in the new Apple iPod nano (5th Gen)".

The article goes on to suggest that the application would also allow you to by music from the mobile iTunes store once you hear it, no doubt massively increasing sales in iTunes.

Apple has so far shied away from offering a radio on its iPod line, however with Microsoft's Zune HD offering the feature, some believe that Apple is making the move as to not play second fiddle to the OLED packing MP3 player.

It is also expected that the radio app would offer the same Live Pause functionality that the Nanos currently enjoy.

We will keep you posted.