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Chief executive John Lovelock said that anyone sharing files illegally is in breach of the terms and conditions of their internet connection so the ISPs have to act. If they don't, then the government must stand by its threat to legislate.

"In an ideal world there would be no place for legislation but unless the ISPs get their house in order then the Government will act," he said.

"There is no doubt that there would be expensive implications for everyone if we ended up monitoring Internet traffic within the existing data protection environment. It would be expensive, time consuming and deeply unpopular. What we have been advocating for some time now is a voluntary code of conduct and self governance."

Lovelock also criticised the European Parliament's recent vote to oppose any moves to disconnect alleged sharers.

"We are disappointed that MEPs seem not

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to be taking the future of our economy seriously as the UK Government is," he said. "There is always a balance of rights, but currently some consumers and businesses are doing their best to kill off some of our key creative industries which employ many people."

UK music industry bodies, notably the BPI, have called on ISPs to adopt a "three strikes and out" approach to alleged sharers, giving them two warnings before cutting off their internet connection. The government has urged both sides to reach a voluntary agreement or it will intervene.

Most ISPs have said they are willing to talk - with Tiscali even taking some measures - but those talks have reached a stalemate over who will cover the costs of taking action.

One ISP that is not interested in any kind of policing is Carphone Warehouse's TalkTalk. Its chief executive Charles Dunstone said recently that it is the duty of ISPs to protect their users, not carry the can for music industry failures.

Consumer rights bodies are also opposed to the "three strikes" approach, arguing that it is not fair or sensible to disconnect whole households because of the actions of one person.