UK internet users could face an annual charge of up to £30 to download music, under plans to be unveiled today that aim to tackle illegal file-sharing.

The government is backing proposals that would enable millions of broadband users to pay an annual levy which would allow them to copy as much – previously illegal – music from the internet as they wanted. The money raised would be channelled back to the rights-holders, with artists responsible for the most popular songs receiving a bigger slice of the cash.

Internet service providers (ISPs) and the music industry will announce today that 12,000 letters will be sent over the summer to repeat downloaders warning them they are breaking the law. They hope the shock tactics will deter internet users from illegal file-sharing.

An estimated 6.5 million broadband users unlawfully download files every year, which the industry warns has resulted in a slump in CD and DVD sales. About 95 per cent of music downloads from the internet are thought to be illegal.

According to a music analyst the cash raised by including the top-up in the fees paid to ISPs could match the current £1.2bn turnover of the British record industry.

A memorandum of understanding has been signed by the British Phonographic Industry (BPI), which represents hundreds of record companies, and the six largest internet providers. It commits them to work together to achieve a "significant reduction" in illegal file-sharing.

Story filed 24.07.08