People who illegally download films and music will be cut off from the internet under new legislative proposals to be unveiled next week.

Internet service providers (ISPs) will be legally required to take action against users who access pirated material, The Times has learnt.

Users suspected of wrongly downloading films or music will receive a warning e-mail for the first offence, a suspension for the second infringement and the termination of their internet contract if caught a third time, under the most likely option to emerge from discussions about the new law.

Broadband companies who fail to enforce the three-strikes” regime would be prosecuted and suspected customers' details could be made available to the courts. The Government has yet to decide if information on offenders should be shared between ISPs.

Six million broadband users are estimated to download files illegally every year in this country in a practice that music and film companies claim is costing them billions of pounds in lost revenue annually.

Britain's four biggest internet providers – BT, Tiscali, Orange and Virgin Media – have been in talks with Hollywood's biggest studio and distribution companies for six months over a voluntary scheme.

Parallel negotiations between Britain's music industry and individual internet providers have been dragging on for two years.

Major sticking points include who will arbitrate disputed allegations, for example when customers claim to have been the victim of “wi-fi piggybacking”, in which users link up to a paid-for wireless network that is not their own. Another outstanding disagreement is how many enforcements the internet companies will be expected to initiate and how quickly warning e-mails would be sent.

International action in the US and France, which is implementing its own “three-strikes” regime, has increased the pressure on British internet companies and stiffened the Government's resolve.

The commitment forms part of a Green Paper on the creative industries entitled The World's Creative Hub to be launched by Andy Burnham, the Culture Secretary, and Gordon Brown next week.

UK net firms are resisting government suggestions that they should do more to monitor what customers do online.

The industry association for net providers said legal and technical barriers prohibit them from being anything other than a "mere conduit".

The declaration comes as the government floats the idea of persistent pirates being denied net access.

Net firms have been stung into defining their position by the emergence this week of a draft government consultation document that suggests ISPs should be drafted in to the fight against piracy.

It suggested that people who persistently download and share copyrighted material could have their net access removed.

A spokesman for the Internet Service Providers Association (ISPA) said the 2002 E-Commerce Regulations defined net firms as "mere conduits" and not responsible for the contents of the traffic flowing across their networks. He added that other laws on surveillance explicitly prohibited ISPs from inspecting the contents of data packets unless forced to do so by a warrant.

The spokesman said technical issues also made it hard for net firms to take action against specific types of traffic. For instance, he said, while some people use peer-to-peer networks to download copyrighted material many commercial services, such as Napster and the BBC's iPlayer, use file-sharing technology to distribute music and TV legally.

ISP Karoo, based in Hull, has changed its policy of suspending the service of users suspected of copyright violations.

The about face was made following a BBC story outlining the firm's practice.

Karoo issued a statement saying that it has been exceeding the expectations of copyright owners. The firm will now adopt a three strikes rule, in which suspected file-sharers will receive three written warnings before action is taken.

We have always taken a firm line on the alleged abuse of our internet connections, said Nick Thompson, director of consumer and publishing services, in the statement: It is evident that we have been exceeding the expectations of copyright owners, the media and internet users. So, we have changed our policy to move in more line with the industry standard approach.

Karoo - the only ISP in the area, which has no BT lines - long held a policy of suspending service of suspected file-sharers. In order to get their service restored, customers had to sign a document promising not to repeat the offence.

Andrea Robinson, a Karoo customer, told the BBC that a day after her service was cut off, she received a letter from the firm claiming that she had been using the peer-to-peer file-sharing service BitTorrent to download the film Terminator Salvation.

On calling Karoo, she was told to visit the company's offices to resolve the issue. They gave me a form to sign to get reconnected. The form basically said 'if I admit my guilt you'll reconnect me'. So I didn't sign it and walked out.

Jim Killock, executive director of the digital rights activists The Open Rights Group, told the BBC that it is totally unfair to disconnect people without notice: In fact, disconnection is something that should only even possibly be considered as a result of court action.

The record industry in July will start sending ISPs offending IP addresses for graduated responses in piracy cases.

Cary Sherman, CEO of the Recording Industry Association of America, said most of the participating ISPs are on track to begin implementing the program by July 1. The ISPs that have joined up with the RIAA are Comcast, Time Warner, Verizon, AT&T, Cablevision and Comcast.

The program requires that ISPs send out one or two educational notices to those customers who are accused of downloading copyrighted content illegally. If the customer doesn't put a halt to the practice, the ISP is then asked to send out confirmation notices asking that they confirm they have received notice.

Legal expert Doug Lichtman, a UCLA law professor spoke to an adult industry seminar about these copyright alerts. Calling them warm 'nastygrams,' Lichtman told the adult industry that they should adopt the system, and that file sharers could be persuaded to be come paying consumers.