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The British Phonographic Institute has proposed a "three strikes" system under which illegal file sharers would receive two warnings concerning their actions, before being stricken from the internet by their Internet Service Provider.

However, in a scathing letter the Carphone Warehouse, which sells broadband through TalkTalk, has now flatly rejected the proposal: "We are the conduit that gives users access to the internet, we do not control the internet nor do we control what our users do on the internet. I cannot foresee any circumstances in which we would voluntarily disconnect a customer's account on the basis of a third party

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alleging a wrong doing," says company chief executive Charles Dunstone.

"We believe that a fundamental part of our role as an internet service provider (ISP) is to protect the rights of our users to use the internet as they choose. The music industry has consistently failed to adapt to changes in technology and now seeks to foist their problems on someone else."

Dunstone went on to say that Carphone Warehouse would take practical and legal steps to defend its customers which could put it on a collision course with the Government, which has threatened legislation should a voluntary agreement not be reached.

The British Phonographic Institute, however, says it is not trying to make ISPs internet police but rather asking them to educate their customers concerning illegal file-sharing and pushing them to act on evidence its provides.

Carphone Warehouse becomes the first company to outright reject the proposals from the BPI, with Virgin Media reportedly still in talks with the film and music industry concerning the scheme.

Orange is thought to be considering a system under which it would send warnings to customers that illegal filesharers would have their details passed onto the BPI.