Many of the bigger hitters in the independent record label community are preparing for a legal battle with YouTube over content being used without permission on the site.

The independents are unhappy with the deal that YouTube have offered them, which sources within the independents say is nowhere near the same deal that has been offered to the major labels.

Google bought YouTube last year for $1.65 billion in stock - and it just so happens that on the same day new deals were announced with Universal Music Group and Sony BMG for content sharing, based on a similar deal YouTube had cut with Warner Music Group a few weeks earlier.

The indie labels make up about 30% of the world market, and this may prove an important test case for Merlin, the organisation set up at MIDEM (and reported on Music Towers) to negotiate exactly these kinds of deals on behalf of the indies. However, Merlin is not expected to be fully operational till the Summer, which could be a significant delay.

In response to the hoo-hah, YouTube have offered a typically vapid, non-specific statement that said nothing about anything.