Britain's six biggest internet service providers have agreed to work with the government and music industry to clamp down on illegal downloading, a music industry association says.

BT, Virgin Media, Orange, Tiscali, BSkyB and Carphone Warehouse signed up to a government-negotiated plan and will send letters to hundreds of thousands of prolific downloaders warning them their activity is being monitored, according to the BPI - formerly known as the British Phonographic Industry. The Motion Pictures Association of America also signed onto the plan.

The agreement is important because it is the first time the British government has gotten involved in combating illegal file sharing.

Equally important is that internet service providers - who have previously resisted music industry demands to cut off customers who share files illegally - have agreed to become involved, too, though not to the level of cutting off customer's service.

Geoff Taylor, the chief executive of the BPI, said the plan marked an important milestone because all service providers "now recognise their responsibility to help deal with illegal file sharing."

The service providers also agreed on Thursday to develop legal file-sharing services as an alternative to piracy.

The IFTI, the international recording industry trade body, said the agreement is a step in the right direction, but that the government needs to do more.

"It is important that it (the government) now drives the process forward to a solution with urgency, and that it achieves concrete, measurable results," IFTI chairman and CEO John Kennedy said.

Britain is not the first country to work with internet service providers in an effort to stop illegal file sharing.

In France, President Nicolas Sarkozy has sought to crack down on illegal downloads and pushed a plan that would suspend or even terminate internet service to multiple offenders.

The plan was signed by the government internet service providers and entertainment industry representatives in November 2007. It allows for the creation of a regulatory agency that, upon artists' requests, could send warning notices to offenders through the service providers. Multiple offenders could then be put on a blacklist barring them from subscribing to any of the ISPs.

However, only pieces of the plan have been put in place and it has yet to be formalised into law.

An earlier 2006 law created sanctions for significant illegal file sharing of up to three years in prison and 300,000 euro ($A490,517) in fines.

Although Britain's plan does not require service providers to cut off customers who share files illegally, consumer rights groups are worried the government may demand this in the future.

"We think that is a disproportionate response," said Becky Hogge, the chief executive of the consumer rights organisation Open Rights Group.

Hogge thinks stronger enforcement measures will not deter illegal downloading.

"They'll have the effect of driving illicit file sharing further underground," Hogge said.

Industry estimates say 6.5 million Britons have downloaded files illegally over the past year.