BOOK chain Waterstone's was last night set to duel with Amazon for online sales after severing its partnership with the US group.

Waterstone's will launch its own website this autumn to compete more aggressively for sales as shoppers switch from buying books on the high street to the Internet.

According to owner HMV, the move "will better reflect the brand's specialist bookselling credentials" and help arrest a trading slump which saw a 5.6 per cent like-for-like fall at Waterstone's over the 16 weeks to April 29.

Waterstone's has run its website in conjunction with Amazon since 2001, but the deal was due to come up for renewal this year.

Details emerged less than a week after HMV fended off takeover interest from Tim Waterstone for the book chain that he set up in 1982. He had put a proposal worth about £280m on the table, but withdrew after losing support from financial backer Lazard.

His bid was dependent on HMV dropping its interest in rival chain Ottakars.

In a trading update yesterday, HMV said like-for-like sales at its core music stores were down 11.4 per cent in the final 16 weeks of its financial year. But it still hoped to post annual profits of about £98m.