Sony Computer Entertainment Europe has told our sister site that chatter about an entry-level 40GB PlayStation 3 is just "rumour and speculation".

Numerous websites and blogs have suggested that Sony is due to unveil a scaled-down console for around GBP 299 in the UK, with USB ports and backwards compatibility functions removed.

The majority stem from a story on Sky's website (apparently via syndication) that claims FoxConn has been signed to manufacture it.

Although the US and Japan have seen PlayStation 3 price cuts this year, the console currently retails in the UK for GBP 425, complete with an extra controller and two first-party games. Other bundles allow consumers to grab more games for the same price.

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