By Kate Holton and Georgina Prodhan

Watford - A host of media executives urged Britain to follow France and clamp down on Internet piracy, with the boss of entertainment group Vivendi warning the economy will suffer if there is delay.

Executives said the industry needed legislation to cut piracy but also needed to improve legal offerings to draw new customers, touting the digital music service Spotify as one that has proved popular.

Vivendi chief Jean-Bernard Levy backed France's recently passed "three strikes" law under which illegal downloaders receive two warnings, after which they can lose their Internet access for up to a year.

Levy said the French decision was right and telecoms groups which objected were missing the point.

"At Vivendi, we are in the content business, we are in the telecom business, and there is no internal debate," he told the "c&binet" forum on the creative industries.

"The priority is not to grow... traffic on the ISPs. The priority is that creators, people who develop content, should find a way (to be rewarded)."

Britain's media and telecoms industries have been engaged in a debate for 18 months over whether Internet service providers should be obliged to disconnect customers who illegally download movies and songs.

Britain's business minister Peter Mandelson is due to give an update on the government's stance when he speaks at a British government-sponsored conference on Wednesday and the discussion dominated the event on Tuesday, with a significant majority of almost two dozen speakers calling for action.

The chief executive of EMI Music, Elio Leoni-Sceti, said hounding consumers would not work and said the industry had to work together to support the government in its decision.

Leoni-Sceti agreed with Virgin Media Chief Executive Neil Berkett, who said on Monday legal sites needed to be easier to use and more impressive than illegal sites.

Comparing those downloading illegal content to those who drive above the speed limit, Leoni-Sceti said the industry needed to start docking points.

"You need to have your licence taken away," he said. "That's a proper stick. And as long as the legal is more enjoyable than the illegal then we're moving in the right direction."

Britain's creative industries were worth an estimated 60 billion pounds in 2006, or over six percent of the economy, but have been damaged in recent years by the relentless rise of illegal downloading.

Appeals for the Internet service providers to intervene have mostly fallen on deaf ears, with telecoms groups such as BT and Carphone Warehouse objecting to playing the role of Web policemen.

Vivendi's Levy said this position was shortsighted and would leave ISPs spending vast sums on upgrading their networks, simply to carry illegal traffic.

"It seems to me so obvious that Britain should be even more in favour of protecting and developing its media industries, its own heritage," Levy said.

The British government has said it is considering ways of tackling unlawful peer-to-peer file sharing, such as blocking access to download sites, reducing broadband speeds or temporarily suspending an individual's Internet account.

But executives have accused the government of moving too slowly. "The sooner Peter Mandelson tells us what he is going to do, and then for God's sake does it, then we can get on (with) talking about new business models," one telecoms executive said. - Reuters