Illegal downloaders face web ban

The Business Secretary confirmed he was pressing ahead with the measure despite warnings from internet providers that it could push up prices and encourage hijacking.

TalkTalk said it would resist any instructions to penalise customers and was prepared to fight its corner in the courts.

But Lord Mandelson said that unlawful file-sharing was posing a "genuine threat" to the creative industries, which were costing millions of pounds a year. "We cannot sit back and do nothing," he told the C&binet Forum conference in Hertfordshire.

He insisted that so-called technical measures - including slowing down connections as well as cutting them off - would only be used as a "very last resort".

They will be included in the forthcoming Digital Economy Bill, which is expected to come into force next year.

But for the first year, illegal downloaders will face only the threat of legal action from copyright-holders, who will be able to obtain names and addresses via internet service providers (ISPs). ISPs will also be required to issue warning letters, a move which ministers hope will itself lead to a reduction in illegal downloads.

If the practice has not been reduced by 70% by mid-2011, reserve powers to take technical measures will be awarded to media regulator Ofcom.

BT said it was "disappointed" that ISPs would have to meet some of the costs of the new regime themselves, warning that broadband prices would rise as a result. And TalkTalk described the plans as "ill-conceived" and replacing the judicial process for a "kangaroo court".

But the BPI, which represents the recorded music industry in Britain, backed Lord Mandelson's proposals. Chief executive Geoff Taylor said: "The measures confirmed ... by Government are a proportionate way of encouraging illegal filesharers to embrace the new services, and will drive further innovation that will benefit online consumers."