Broadband provider Tiscali has seen an agreement with the British Phonographic Industry (BPI) over preventing internet piracy collapse, it has emerged.

The internet service provider's consultation with the organisation about combating illegal downloading broke down amid arguments over who would cover the costs of the proposals, the Register reports.

A previous agreement involved banning internet users who persistently downloaded pirated material. The talks were expected to serve as a benchmark for the rest of the industry.

Tiscali was the first internet service provider to become engaged in the piracy dispute after it refused to hand over customer details to the BPI without a court order.

The three-strike deal skirted the problem by allowing Tiscali to ban customers without releasing individual account details.

BPI blamed Tiscali for the breakdown, with a spokesperson stating that it "is trying to force us to pay a substantial levy to enforce its own terms and conditions".

Earlier this week, the Register reported on a recent lobby by the Internet Service Providers' Association which aimed to put pressure on the record industry to contribute to the costs of monitoring illegal internet usage.