The announcement means that blockbusters like Shrek the Third, and Bay's Transformers film, will not be released on Blu-ray.

Movies directed by Steven Spielberg, however, will continue to be released in both formats.

Format war

Electronics giant Sony, which owns Blu-ray, is locked in a battle for supremacy with Toshiba, which created HD-DVD.

Each format offers a higher quality of picture and sound than current DVDs.

Blu-ray discs have more storage space, which can mean a better image, while HD-DVD offers more interactive features.

The race for dominance is reminiscent of the format war between VHS and Betamax video tapes in the 1980s.

The Blu-ray camp has notched up some victories against its rival recently, including a vote of support from video rental company Blockbuster.

Prices of players on both sides have dropped recently - with dedicated HD-DVD players outselling Blu-ray in the US.

However, the fact that Sony's PlayStation 3 games console can play Blu-ray discs means more homes have Blu-ray players.

It is believed that Hollywood studios could ultimately decide the fate of the two formats, but the fact that Sony is itself a movie studio has complicated the matter.

Warner Brothers is now the only company to release films in both formats, meaning that Spider-Man 3 will be a Blu-ray exclusive, while The Bourne Ultimatum will only be available on HD-DVD.

Famous supporters

Aside from Bay, several film-makers have voiced their support for different formats.

Producer Jerry Bruckheimer, who is responsible for Pirates of the Caribbean series, said Blu-Ray "far surpasses any other format".

A spokesperson for Dreamworks Pictures told film trade paper Variety that Steven Spielberg was also "a supporter of Blu-ray", although he added: "He is not exclusive to either format".

Bay, whose previous film credits include Bad Boys, Pearl Harbour and Armageddon, wrote on his website that he had been converted to HD-DVD after watching war epic 300.

He explained his original comments were written late at night after friends had complained they would not be able to watch Transformers on Blu-ray.

"As a director, I'm all about people seeing films in the best quality possible, and I saw and heard first-hand people upset about a corporate decision," he wrote.

"I heard where Paramount is coming from, and the future of HD, and players that will be close to the $200 (£100) mark which is the magic number. I like what I heard," he said.

"So I think I might be back on to do Transformers 2!"