As HD DVD and Blu-ray rumours continue to whiz around CES in Las Vegas, the latest Chinese whisper to come out of the show is that Paramount and long time staunch HD DVD backer Universal will drop the format next month sounding the death of the format.

This time, coming from Bill Hunt at Digital Bits, the reporter says his "second to none" sources informed him that both Universal and Paramount are in the process of going Blu.

How is he privy to this information? Well although he says that both studios will categorically deny the move, he points out that Universal's exclusivity contract with HD DVD expires at the end of January.

His sources are also telling him that Paramount will make the announcement any day, presumably not wanting to make the announcement at CES.

However responding to the rumours, Ken Graffeo, Executive Vice President, High Definition Strategic Marketing, Universal Studios Home Entertainment said: “This is just a rumour, both Universal and Paramount are continuing to produce movies in HD DVD”.

The news comes just days after Paramount moved to quash rumours about it going Blu-ray only.

Furthermore Microsoft also moved to quash rumours that it was considering ditching the HD DVD format claiming that the source of a story by Reuters took a quote from Albert Penello, group marketing manager for Xbox hardware was taken out of context.

We will keep you posted.