Some of Britain's biggest Internet service providers have reached an accord which voluntarily binds them to a code of practise intended to sharply reduce illicit file-sharing.

The six ISPs -- Virgin Media, BSkyB, Carphone Warehouse, BT, Orange and Tiscali -- have signed up to a Memorandum of Understanding, drawn up following dialog facilitated by the government's department for business, enterprise and regulatory reform, labels body the BPI and the Motion Picture Association.

The signatories will be required to work with rightsholders in both music and film communities to clamp down on file-sharing, while committing to further develop the legitimate online market. As part of an initial three-month consumer education trial, the ISPs will each be required to deliver thousands of warning letters to those subscribers identified by the BPI as serial file-sharers.

All parties have also agreed to work together with media regulator Ofcom to hammer out effective measures to deal with persistent law-breakers.

The BPI is endorsing a "three step" process, starting with an educational letter. If necessary, the next stage would involve suspending the users' account until the illegal activity ceases. The final level would see the customer's account canceled.

The breakthrough was enthusiasticly greeted by the music community. IFPI chairman and CEO John Kennedy described the agreement as a "big step" towards reaching a solution to online piracy, adding: "it shows that the process of engaging ISPs that was set in motion in France last year is gathering real momentum internationally."

BPI CEO Geoff Taylor adds: "This MOU represents a significant step forward, in that all ISPs now recognize their responsibility to help deal with illegal filesharing. This MOU will help to create an environment in which such new digital services models can flourish."

Over the past year, Britain's ISPs have faced a volley of criticism from the music industry for doing little -- or nothing -- to curb P2P activity on their networks. The screws were tightened earlier this year when the government said ISPs and the industry had to reach a voluntary solution by April 2009, or face legislation.