QTRAX, a new free, ad-funded Internet music service that launched with a big fanfare Sunday seems to have rapidly hit a series of false notes. The New-York based company's promise to usher in a new era of free and legal peer-to-per (P2P) music services is in question after it appeared that the firm did not have the licensing agreements it said were in place with the big record labels.

Barely 24 hours after the launch of its file-sharing service offering unlimited free downloads, industry sources said the company had not yet signed deals with the big four music "majors", EMI, Universal, Warner and Sony BMG.

QTRAX executives said that the company is currently finalizing agreements with the music companies.

Qtrax had also promised to offer a BETA version of the software for PC (Mac version is also expected) last night. However, the company posted the following message on the web site saying that downloads weren't yet available:

"We're thrilled with the massive response we've received. To ensure the best user experience, we're activating accounts in stages. In the meantime, enjoy all the functionalities of the Qtrax player like importing and playing your music and searching for artist-related content. "

Qtrax had said the it planned to launch on Monday with around 25 million to 30 million copyrighted tracks.