Paramount Studios could soon drop its support of HD DVD following Warner's recent backing of Sony's Blu-ray technology, effectively killing off HD-DVD and bring the format war to a definitive end.

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According to the Financial Times, in a story that broke only a few hours ago, Paramount is understood to have a clause in its contract with the HD DVD camp that would allow it to switch sides in the event of Warner backing Blu-ray.

Paramount and DreamWorks Animation came out in support of HD DVD last summer, joining Universal Studios as the main supporters of the Toshiba format.

Warner's decision last week to exclusively back Blu-ray saw it join Walt Disney, 20th Century Fox and MGM Studios as backers of the Sony format. The recent move gives Blu-ray about 70 per cent of Hollywood's output. Universal meanwhile, has declined to comment on its next-generation DVD plans and speculation is rife that an announcement at CES by Bill Gates unveiling an Ultimate Xbox 360 with a built-in HD DVD player was cancelled at the last minute following the move by Warner.

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