Internet ban on download cheats

Under the proposals anyone caught accessing pirated material could be stripped of their connection to the internet under a "three strikes and you're out" policy.

The first step would be an emailed warning, followed by a suspension, and then finally termination of their internet contract.

The Government could force internet service providers to take action against their own customers if they are found to have used illegal filesharing sites.

It is expected to confirm it intends to legislate on the issue when it publishes a Green Paper on the future of the creative industries next week, with broadband firms that fail to enforce the rules facing the possibly of prosecution.

Some six million computer users are estimated to download files illegally every year in the UK, costing music and film companies billions in lost revenue.

A draft of the Green Paper states: "We will move to legislate to require internet service providers to take action on illegal filesharing."

Major ISPs such as BT, Virgin and Tiscali have been in talks with the entertainment industry about a voluntary scheme for policing pirate activity but no agreement has been reached.

Sticking points are thought to include how disputed allegations would be arbitrated - for example, when customers claim other people have been " piggybacking" on their internet service.

A spokesman for the Internet Service Providers Association said it remained hopeful a deal could still emerge: "Every right-thinking body knows that self-regulation is much the better option in these areas."

A spokesman for the Department for Culture, Media and Sport said: "Early drafts of our creative economy programme document were circulated to stakeholders for comment.

"The content and proposals for the strategy have been significantly developed since then and a comprehensive plan to bolster the UK's creative industries will be published shortly. We will not comment on the content of the leaked document."

Roz Groome, vice-president of antipiracy for NBC Universal, welcomed the prospect of new laws. He said: "We welcome the signal from government that it values the health of the creative industries and takes seriously the damage caused by widespread online copyright infringement.

"We call upon ISPs to take action now. They must play their part in the fight against online piracy and work with rights owners to ensure that ISPs' customers do not use their services for illegal activity."

Shadow arts minister Ed Vaizey said: "David Cameron called on the internet providers to address this issue last summer. The credibility of the Government's latest threat is undermined by the fact that ministers have spent so many years dithering on whether to legislate."