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Cutting off people suspected of filesharing could serve to hurt broadband innovation by discouraging music companies from coming up with new approaches.

In the past, music piracy has helped to spur on the development of streaming applications, such as Spotify, which raise revenue primarily through advertising.

However, the Guardian suggested that 95 per cent of all music files in online circulation are still unlicenced tracks.

Now the UK government looks set to adopt a hard line similar to that of France's president Nicolas Sarkozy, distancing itself from the approach outlined in the Digital Britain report.

"While it is important to tackle filesharing, this approach, if implemented, is not going to help anyone's case - and especially not the record industry's at a crucial time when it is cleaning up its tarnished image," Eamonn Forde said in a column for the newspaper.

He urged record labels to continue on the path towards reinventing themselves for the digital age, regardless of the stance taken on piracy, or risk becoming even more of an "anachronism" in the broadband age.

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