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It has emerged that Tiscali, the UK's fourth largest provider, agreed last October to contact subscribers that UK music industry body, the BPI, claimed were sharing music files over P2P networks. Warning letters were sent to 21 subscribers, four of whom eventually had their accounts closed down.

The agreement with Tiscali is exactly the sort of deal the BPI says it wants to strike with all ISPs in an effort to stamp out file sharing. But the BPI says it is not prepared to pay, while Tiscali says that it understood that the October agreement included a provision for sharing the cost of pursuing alleged sharers.

"The BPI led us to believe we had concluded an agreement to implement its preferred process in October

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last year, which not only demonstrated joint leadership in this area but also that both of our industries could work together to tackle this issue," the spokesperson claims in an email.

She adds that Tiscali is not seeking to make money out of the process: its charge is only towards a share of the costs.

The BPI claims that unless Tiscali is prepared to foot the bill, progress is impossible. "While there have been discussions between BPI and Tiscali, we have not been able to reach agreement on a long-term solution," a spokesman says. "That's because Tiscali is trying to force us to pay a substantial levy to enforce its own terms and conditions."

"Discouraging customers from using their accounts unlawfully is an obligation that any ISP should bear as part of its core business," its spokesman adds. "That is the socially responsible thing to do, and it's disappointing if Tiscali sees illegal behaviour on its network as a further opportunity to make money at the expense of the music community."

If ISPs cannot reach an agreement with the BPI, then the government has confirmed that it will attempt to introduce legislation compelling service providers to act against alleged sharers.