People who are caught repeatedly downloading movies, music and TV shows illegally would have their internet disconnected under legislative changes being considered by the Federal Government.

The movie and music industries have been pushing ISPs to implement this "three-strikes" scheme voluntarily for years but talks have stalled. The film industry is now suing iiNet in an attempt to have the courts force ISPs to do more to prevent illegal downloading over their networks.

Behind the scenes, the content owners have been pressuring the Government to step in and resolve the impasse through legislation.

David Vaile, executive director of the UNSW Cyberspace Law and Policy Centre, raised serious issues with the proposal, such as that customers could be disconnected following mere allegations of copyright infringement by the content owners without having been found guilty of an offence by the courts.

"If you're alleging someone is doing something unlawful, you have to prove it ... you don't have a situation like China where the whole system, as we've seen with Mr Hu, is balanced in the opposite direction - you don't get your day in court, you don't get to hear the allegations against you and, even if you did, the procedure and the rules are weighted against you," he said.

In a report on the Digital Economy, released this week, the Communications Minister, Stephen Conroy, said the Government would work to develop a solution to reduce unauthorised file sharing.

Illegal downloading is booming in Australia as hundreds of thousands more Australians have turned to illegal download sites in the past year, Nielsen figures show.

Conroy said the "three-strikes" system was one in which people, who the content owners identify as illegal downloaders, are sent warning notices by their ISPs, before being disconnected if they are caught three times.

"The Government recognises a public policy interest in the resolution of this issue," the report said.

Asked to clarify this statement, a spokeswoman for Conroy said the Government was considering the three-strikes system but was awaiting the result of the iiNet case, which is set to go to trial in October.

"Depending on the outcome of the case, the Government will determine whether there is a need for legislative change," the spokeswoman said.

This could be interpreted as meaning that, if iiNet wins the case and no precedent is set requiring ISPs to police the download habits of their customers, legislative changes forcing them to do so may be necessary.

Vaile said that it had always been open to the copyright owners to pursue through the courts anybody they thought was breaching their copyrights.

This has been the strategy in the US, where the industry has sued individual downloaders, but the move has become a PR disaster as single mothers and even dead people have been targeted.

In Australia, Vaile said the movie and music industries were trying to change the role of the ISPs from being "the agent of the customer" to being the content owners' "enforcers".

"The idea that you would cut someone off - for any reason - is actually a very serious matter; you're sort of disenfranchising them," Vaile said.

"But also the idea that you would do that essentially on a scheme that had been set up with the scales entirely weighted to the people making allegations - you're removing the courts."

The Government noted in its report that there had been some criticisms of the three-strikes system "including the lack of judicial oversight of administering sanctions based on private allegations, the lack of public transparency about the process and concern over consumer rights".

Peter Coroneos, chief executive of the Internet Industry Association, raised similar concerns to Vaile, saying that, in a legal system based on the presumption of innocence, ISPs should not be forced to become "judge, jury and executioner".

"Many in our industry believe that, had the music industry mobilised earlier to embrace the internet and exploit its inherent efficiencies, we would have already seen the kind of win-win outcome that we've seen in other areas of online activity such as travel and online banking," he said.

The three-strikes scheme has been proposed in both France and New Zealand, but both countries dropped the proposal after a public backlash.

This week both France and New Zealand reintroduced new, modified three-strikes proposals with enhanced judicial oversight.

Britain is also reportedly considering three-strikes legislation, and the British Government outlined a goal of reducing unlawful file sharing by 70-80 per cent by 2011 in its Digital Britain report, released last month.

Despite the cries from the content owners, official figures show legal digital music downloads in Australia growing by 35 per cent last year, while box office takings were the highest on record last year at $946 million.

The Opposition's communications spokesman, Nick Minchin, said: "Of course the protection of copyright is important, but I'm not sure shifting the weight of responsibility onto ISPs through a heavy-handed legislative approach would be either reasonable or practical."