Virgin Media has joined forces with the British Phonographic Industry in a pilot scheme that could see warning letters sent to users who download music tracks illegally, according to the Daily Telegraph.
This is the first time that a UK internet company has taken a public stance to share responsibility for curbing piracy.
The move follows two years of wrangling between ISPs and record labels in an attempt to secure an industry-wide agreement.
"We have been in discussions with rights holders organisations about how a voluntary scheme could work. We are taking this problem seriously and would favour a sensible voluntary solution," said a spokesman for Virgin Media.
BPI technicians will trace illegal music downloads to individual Virgin Media accounts and hand over account details to the broadband supplier, matching them to names and addresses.
Due to go live within months, the pilot follows government warnings in February that legislation would be introduced by April next year unless ISPs reach a voluntary agreement with the music and film industries.
The record labels have been pressing for a 'three strikes' policy that would see a letter warning customers they are committing an offence, followed by suspension for a second offence.
A third 'strike' would see illegal downloaders having their accounts disconnected.
"This is not the time for ISPs to delay further. The government clearly shares the creative community's frustration at the failure of ISPs to take action," said BPI chief executive Geoff Taylor.
Six million broadband users are thought to engage in the illegal download of files each year, which record labels claim are costing them billions of pounds in lost CD sales.