The House of Lords has passed the controversial Digital Economy Bill to the House of Commons.
The bill aims to help rebalance the UK economy by encouraging the production of valuable intellectual property and extending high-speed broadband access to citizens.
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Business secretary Peter Mandelson brought the bill in with little notice paid to controversial clauses aimed at fighting illegal file-sharing.
If passed, these clauses could impose extra obligations on internet service providers. The penalties include a "three strikes" provision that could see websites blocked and users cut off from the web.
The clauses largely parallel the US Digital Millennium Copyright Act, and would give lawful effect to provisions believed to be contained in secret talks on an anti-counterfeiting trade agreement (Acta).
Internet firms such as Google and eBay have objected to the clauses, supported by CEOs of fixed and mobile networks and ISP bodies.
The amended bill is now in limbo between the Lords and the Commons. But parliamentary sources say the bill to be debated by the lower house should be published tomorrow.
It is not clear whether other amendments, drafted largely by the BPI, a music industry body, and proposed by Lord Clement-Jones, have made it into the bill the Commons will debate, or in what form.
Civil rights campaigner The Pirate Party condemned the bill. It said the bill threatened core principles of law such as the right to be considered innocent until proven guilty in a court of law, the right not to be subjected to collective punishments, and the right to free speech.
Pirate Party UK leader Andrew Robinson said, "The public will not respect a law that was quite literally written by the record industry, for the record industry. As it stands, the bill is fatally flawed, and fundamentally unjust."