Barnes & Noble, the leading US book retailer, is to sell a wireless electronic reader rival to Amazon’s Kindle by the end of November that may become the strongest challenge to Amazon’s dominance in the nascent e-reader market.

The Barnes & Noble device, called the Nook, will be sold at the retailer’s more than 750 US stores and online for $259, the same price as the basic version of the Kindle.

It enters a growing field of competitors in a market dominated by Amazon. The Kindle accounts for about 60 per cent of the US e-reader market, according to Forrester, which it shares with Sony’s Reader devices.

Unlike the Kindle, the Nook will allow readers to lend the electronic books they purchase to friends who own the same device for up to 14 days. Owners will also be able to browse through entire books at the retailer’s stores without buying them, using data streamed over the stores’ wi-fi networks.

The Nook appears to be almost the same size and shape as the Kindle 2, or approximately the size of a thin paperback book, and features a similar electronic paper display made by the same manufacturer, E Ink.

The device’s 2 gigabyte memory will hold up to 1,700 e-books and will be supported by both free 3G wireless service from AT&T and wi-fi.

Amazon launched an international version of the Kindle recently, employing AT&T 3G technology. The Nook should eventually be able to operate outside the US as well.

One distinguishing feature of the Nook is the bottom quarter of the screen, where customers can scroll through book covers in colour or search for titles by typing on the area’s virtual keyboard.

Book, newspaper and magazine publishers have been seeking more competition in the e-books market and have complained about Amazon’s policy of withholding customer information from content partners and its business agreement that turns over only 30 per cent of revenue to partners.

It was not immediately clear if or how Barnes & Noble’s policies are more friendly to partners.

The Nook will support the publishing industry standard Epub format or PDB formats. It will also be able to support Adobe’s popular PDF and MP3 audio files and JPG pictures, making Barnes & Noble-purchased files readable on other devices that support the formats.

About 1m e-book titles are available in the store, including 500,000 titles through Google’s Booksearch programme.

The Nook is also the first reader based on Google’s Android operating system, which underpins its mobile phone devices.