The government says it is now highly unlikely to force internet service providers to terminate the accounts of filesharers.
In comments which may allay some of the concerns of consumers and broadband providers, the Prime Minister's Office claimed more moderate action would be taken against offenders.
Responding to a petition against the internet bans as proposed in the digital economy bill the office said it is "very hard to see how this could be deemed proportionate except in the most extreme and therefore probably criminal cases".
It explained that 'account suspension' had been added to the list of possible technical measures which might be considered if measures to tackle unlawful file-sharing through notifications and legal action are not successful.
"However, what is clear is that we would need a rapid and robust route of appeal available to all consumers if we decided technical measures were needed," the Prime Minister's Office stated.
Broadband provider TalkTalk has been lobbying against the filesharer plans through its Don't Disconnect Us campaign.