The British Phonographic Institute (BPI) has threatened Carphone Warehouse with legal action if it fails to cut off people whom the BPI claims are downloading music illegally.

Carphone Warehouse, which owns TalkTalk, was the first ISP to state publicly that it would not enforce the BPI's so-called three strikes policy whereby persistent illegal music downloaders would have their internet connections cut.

The BPI has proposed a scheme under which its investigators will visit P2P sites and harvest information on the user from the data that they make available, including IP addresses.

This information is then fed to the ISP, which is supposed to send a warning letter as a first step.

If it occurs again the user gets a second letter and their access is suspended until they acknowledge the warning. A third offence would see the user cut off.

Carphone Warehouse boss Charles Dunstone has declared that he will not co-operate with the scheme.

Dunstone called the move an intrusion into user privacy, and described it as similar to prosecuting a bus company just because a shoplifter used the bus.

But this refusal has brought quick action from the BPI. A report in The Daily Telegraph claims that Dunstone has been threatened with legal action unless he signs up to the BPI plan.

"Unless we receive your agreement in writing that within 14 days Carphone Warehouse will implement procedures set out above, we reserve our right to apply to court for injunctions and other relief without further notice to protect our members' rights," BPI chief executive Geoff Taylor said in a fax.

"They have been quite heavy-handed in way they have threatened us," said Dunstone.

"They are trying to position this as 'we are friendly and we all want to work together,' but they are threatening legal action in their first letter to me."