LSI +61° 303 is one of the few X-ray binaries with Be star companion from which both radio and high-energy γ-ray emission have been observed. We present XMM-Newton and INTEGRAL observations which reveal variability of the X-ray spectral index of the system. The X-ray spectrum is hard (photon index Γ≃ 1.5) during the orbital phases of both high and low X-ray flux. However, the spectrum softens at the moment of transition from high to low X-ray state. The spectrum of the system in the hard X-ray band does not reveal the presence of a cut-off (or, at least a spectral break) at 10-60 keV energies, expected if the compact object is an accreting neutron star. The observed spectrum and spectral variability can be explained if the compact object in the system is a rotation-powered pulsa
