Illegal filesharers could be disconnected from their internet accounts under proposed legislation in the finalised Digital Economy Bill published today.
The Government published its draft legislation, but has stopped short of making online piracy a criminal offence.
The bill will oblige Internet Service Providers (ISPs), such as Sky or Virgin, to send out warning letters to those caught file-sharing on their networks.
ISPs will also be required to record the number of notifications a user has received and send this data to copyright holders, such as record companies. Rights holders can apply for a court order for the user's name and address.
Minister for Digital Britain, Stephen Timms, said unlawful file-sharing would definitely not be made a criminal offence associated with a potential jail term.
ISPs who fail to hand over customer data to rights holders will face a fine of up to £250,000.
But the Guardian has reported that Secretary of State Lord Mandelson is seeking to amend the copyright laws to give him, and any future Secretary of State, sweeping new powers against people accused of illegal downloading.
Mandelson reportedly wrote to Harriet Harman, the leader of the house and head of the committee responsible for determining changes to copyright legislation. In the letter, Mandelson said he is "writing to seek your urgent agreement" to changes to the 1988 Copyright, Designs and Patents Act "for the purposes of facilitating prevention or reduction of online copyright infringement".
The business secretary is seeking to update the existing bill through a "statutory instrument", which in effect means the government can push through news laws using its parliamentary majority, with the minimum of parliamentary debate.
In effect, Lord Mandelson's secondary legislation could force ISPs to suspend internet accounts of serial downloaders.
File delivery services such as FTP site YouSendIt are also targeted in the new Bill. In his letter to Harman, Mandelson labelled such services as "cyberlockers", that is websites that offer users private storage spaces whose contents can be shared by passing a web link via email.
"These can be used entirely legitimately, but recently rights holders have pointed to them as being used for illegal use," Mandelson writes.
The Business Software Alliance (BSA), which has supported the Government's efforts to tackle downloading, has welcomed the bill. Francisco Mingorance, senior director of government relations of the BSA said: "The Digital Economy Bill published today is an important step toward addressing the problem of internet piracy which presents a serious and immediate threat to software developers and other copyright-based industries."
"We are pleased the proposed bill includes provisions to ensure that a fair and impartial review will take place before any access restrictions can be imposed against alleged online copyright infringers. The requirement for due process protects the vast majority of individuals who use software, computers, and the Internet for a myriad of legal and legitimate personal and business reasons," he said.
"As the bill moves forward, BSA wishes to reiterate the importance of upholding this element and cautions policymakers against the broad application of anti-piracy content identification and filtering technologies which could degrade the user experience and hurt innovation in Internet-based application and services."
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