Internet service providers will start warning their customers who illegally download files as Ofcom cracks down on online piracy.
Communications watchdog Ofcom has drafted plans to encourage internet users to download music and films legally, with suspected illegal downloaders given 20 working days to appeal against allegations of breaching copyright.
"These measures are designed to foster investment and innovation in the UK's creative industries while ensuring internet users are treated fairly and given help to access lawful content," said Claudio Pollack, Ofcom's consumer group director.
"Ofcom will oversee a fair appeals process and also ensure that rights holders' investigations under the code are rigorous and transparent."
Industry bodies will monitor file-sharing sites and pass on information on illegal downloaders to the biggest ISPs.
They will then write to customers informing them of allegations they have infringed copyright.
If customers get three or more letters within 12 months, copyright holders, such as record labels or film studios, can seek a court order allowing them to be identified so they can face legal action.
Creative Industries Minister Ed Vaizey said they had to be able to "protect their investment".
"They have the right to charge people to access their content if they wish, whether in the physical world or on the internet," he said.
"We are putting in place a system to educate people about copyright to ensure they know what legitimate content is and where to find it."
The code will initially cover ISPs with more than 400,000 broadband-enabled fixed lines - currently BT, Everything Everywhere, O2, Sky, TalkTalk Group and Virgin Media - which account for more than 93 per cent of the retail broadband market in the UK.
Customers will be able to challenge allegations through an independent appeals body but it will cost £20, which is refundable if the appeal succeeds.