£299 PS3 imminent?

Consumer site CVG is reporting that “several” off-the-record sources have assured it that Sony is preparing to counter the massive hype generated by Microsoft’s release of Halo 3 by launching a stripped down 40GB version of the PS3 for £299 in the UK.

Sky News is apparently reporting that the unit will be missing several of the features currently boasted by the 60GB model – such as backwards compatibility and USB ports.

Meanwhile, Next-Gen reports that Sony is turning to PlayStation2 producer FoxConn to produce the new hardware.