The Apple iPhone will not be available as a pre-pay handset when it goes on sale in Europe at the end of the year.

The iPhone will be on sale with a contract deal only, according to reports of an interview on setteB.IT with Pascal Cagni, head of Apple Europe. Cagni's remarks were published originally in Italian and translated by Apple Insider .

The comments scotched speculation that the iPhone might be sold in a pre-pay package. "About the carrier, we still don't have any news to provide you," Cagni said. "I can say that for Italy, those of you very accustomed to pre-paid, there will be issues with the iPhone."

Asked directly if this meant the same subscription-only strategy that Apple has adopted for the US launch would apply to Europe and Italy, Cagni said: "Yes, I can confirm that it has been decided that it will only be offered by subscription."

The iPhone will launch in the USA on 29 June and is scheduled for a European launch late this year.