British newspaper magazine for the last four years, The Royal Gazette can reveal.

The Phoenix Stores have wrongly been charging extra for The Sunday Times magazine -- which they have been receiving free of charge from Britain.

Last night, Phoenix Stores president Mr. Reid Young admitted the error following an investigation by The Royal Gazette , which was prompted by a reader's complaint.

But Mr. Young put it down to an "honest mistake'' rather than an intentional effort by his firm to rake up more profits.

"I'm most embarrassed about this,'' said Mr. Young. "We've got major egg on our faces.'' To try to make up, he has promised to give away the magazine for six months to readers of The Sunday Times, starting in the New Year.

Unlike anywhere else in the world, the Phoenix Stores have been selling the magazine separately from the newspaper.

They are currently charging $3.25 -- a price that has been called "crazy'' by Mr. John Dyer, foreign sales manager for The Sunday Times.

Since customers are charged $3.95 for the newspaper, anyone wanting the complete package must fork out $7.20.

Mr. Young said the error happened because the Phoenix Stores company had been under the impression it was being charged extra for the magazine by its supplier.

In fact, the company has never been charged any additional sum for the magazine and just has to pay freight costs.

"It was a question of the right hand not checking what the left one was doing,'' said Mr. Young.

He added: "Because of your investigation and the letter to the Editor regarding the matter, we now find that we have been effectively overcharging for this publication.

"There is no real excuse we can give for this error and The Royal Gazette and its customers have our most sincere apologies.

"We should also like to thank our customer for bringing this to our attention and for The Royal Gazette for following it through.

"Until we contacted the London Times and our distributor/consolidator in London, we were sill under the original impression that we were being charged separately.'' He said that the magazine arrived in Bermuda separately from the newspaper, and had its own freight charge of between $1.30 and $1.75 per copy, depending on exchange rates.

This means his company has a current mark-up of between $1.50 and $1.95 per copy of the magazine.

Mr. Dyer was astonished when he learned of the rip off.

"It's the first instance I've ever heard of the magazine being sold separately,'' he said.

"I'm going to send them a fax saying it's come to my attention that the magazine is being sold for $3.25. It's crazy.

"Sometimes, if there's an opportunity for people to make a fast buck, they will.'' After the six-month free offer was over, Mr. Young said the magazine would then be sold with The Sunday Times newspaper, but an additional charge would be added to cover freight costs.