Could, as Michael Pachter previously predicted, a 40GB model of the Sony PlayStation 3 be arriving sooner rather than later? CVG reports that it has learnt from several sources that the newest (third) version of the next-generation console will be priced at £299 GBP (around $600 USD).

However, with such a low price tag (in European terms at least), comes one or two drawbacks. Sky News reports that the 40GB PS3 will not support backwards compatibility with PS2 or PSOne games, nor will it include USB ports.

Word on the street is that Sony will speak out about the rumours officially this week, in an attempt to somehow spoil the launch of Halo 3 on the Microsoft Xbox 360.

UPDATE: Sony’s European arm has told GamesIndustry.biz that all chatter of a 40GB is “pure rumour and speculation.” Still, doesn’t mean it might not be true…