Google-owned YouTube has deals with three of the four major record labels to show their artists' videos, but that only covers the video and performance rights. Songwriting rights lie with publishers, who are represented by rights agency PRS for Music.
"PRS is now asking us to pay many, many times more for our licence than before," said a statement from Patrick Walker, director of video partnerships for YouTube in Europe. "The costs are simply prohibitive for us – under PRS's proposed terms we would lose significant amounts of money with every playback."
PRS for Music disputes the claims. "Google has told us they are taking this step because they wish to pay significantly less than at present to the writers of the music on which their service relies, despite the massive increase in YouTube viewing," said a statement from the body.
It said that the two parties had not finished negotiating. "This action has been taken without any consultation with PRS for Music and in the middle of negotiations between the two parties," said the organisation's statement. "PRS for Music has not requested Google to do this and urges them to reconsider their decision as a matter of urgency."
The dispute has arisen because YouTube's previous licence from PRS for Music had expired and the two sides have failed to come to a new agreement.
YouTube said that the problem was not simply one of licence fees. It claimed that it was not clear exactly what the licence would cover.
"PRS is unwilling to tell us what songs are included in the license they can provide so that we can identify those works on YouTube – that's like asking a consumer to buy an unmarked CD without knowing what musicians are on it," said Walker.
PRS for Music chief executive Steve Porter said that it believed the withdrawal of the videos "only punishes British consumers and the songwriters whose interests we protect and represent".
Clashes over licensing have plagued online music services. Online radio stations such as Pandora have had to shut down international operations because of failures to negotiate licensing rates which they think are workable.
Even in the US the online radio industry is caught in a fight with authorities over how much stations should pay in order for listeners to hear music for free.
YouTube and PRS for Music both said that they hoped that music would be available again soon on YouTube to UK users.
"We're still working with PRS for Music in an effort to reach mutually acceptable terms for a new licence, but until we do so we will be blocking premium music videos in the UK that have been supplied or claimed by record labels. This was a painful decision, and we know the significant disappointment it will cause within the UK," said Walker. "We hope that professional music videos will soon be back on YouTube for our users in the UK to enjoy."