Rumours of a new-look handheld have died down in recent weeks, but they return with vengeance today, word on the street suggesting that the next iteration of Sony's handheld could be unveiled at E3, and out before Christmas.

CVG cite an insider source, who is said to be close to the project, as confirming that the so-called is on the way - and will include iPhone-like features.

A sliding touch screen is, as before, on the cards and there it'll apparently include D-pads as well as dual analogue controls too.

Reports indicate that the new platform will apparently support older PSP titles as well, in addition to simpler touch screen games, which will be delivered via the PlayStation Store in a similar fashion to Apple's App Store.

We've already heard chatter that the new system will drop UMD support (Dave Perry himself told us that one), with the console instead set to focus on distribution.

Or, of course, this could be nonsense. We'll keep you posted.

By Luke Guttridge