The lines of supply that put software into the shops are taking another battering as manufacturers, distributors and shop-keepers square up to each other.

Only three weeks ago Prism pulled out of software distribution. Another leading software distributor, Websters, is now coming under fire as all the links in the chain try to live with the slump in demand that has hit the software industry this summer.

Websters, the middle man between the software producer and stores like Boots and Ketts that sell you the goods, has been criticised for the terms under which it trades. But Clive Digby-Jones, head of the company, defending its policy: "We are an honest broker, supporting both the retailer and the supplier. If we're to continue, which we fully intend to do, we must be free to deal."

He also issued a warning that has far-reaching implications for users in the choice and availability of software they can expect: "Unless the retailers, the wholesalers and the manufacturers get together and everybody gives way a little it will be left to the survival of the fittest."

The summer has been a bad one for software companies and store owners alike, and it looks as though distributors are getting it in the neck from both sides. "A lot of people have ended up over-stocked," said Mr. Digby-Jones, who is also secretary of the Guild of Software Distributors. He contrasted this with earlier boom times when retailers enjoyed high discounts and manufacturers could reckon on high returns. Now some of the retailers are being forced out of the business, and under-capitalised software houses are feeling the pinch.

"We all face the problems of piracy, of smaller retailers going under, and larger retailers making quite heavy demands," he said. "Now we are facing realism."

A crisis has been looming for the software industry throughout the summer, with some well-known names and several smaller ones going out of business. All the parties are looking to a bumper Christmas to see them out of the woods, but Mr. Digby-Jones said that he was trying to set up a series of meetings to ensure that a short-term improvement doesn't obscure the seriousness of the problem.