The United States has warned that Malaysia's proposal to cut prices on computer software and compact discs could backfire and prompt producers to shun the country, a report said today.

Market forces will compel producers based in the United States, which owns 70 percent of disc copyrights, to shift to more lucrative markets, US Department of Commerce assistant secretary William H Lash was quoted as saying by the Sun .

"This (controlling prices) will be to the detriment of the country and the government's Multimedia Super Corridor (MSC) project and plan to implement a knowledge-based economy," he said.