Pure Entertainment Games PLC has given up the dotcom fight and decided to shut its free games site freeloader.com.

The company blamed its decision on the current global difficulties facing the online ad market.

In a statement the company said that it took the decision with "great reluctance and regret".

PEG said that despite a seasonal downturn in ad revenues, the company's UK sales force had generated revenues as expected.

However, outside the UK ad sales have under-performed and the company said that it was unwilling to make the necessary investment to turn it around.

Executives said they have had "serious discussions" with possible buyers but nothing has yet been concluded.

By late afternoon shares in the AIM-listed company had dropped 77 per cent - a fall of almost 11p - resting at 3.25p. ®