Hundreds of illegal file-sharers in Ireland will not face the 'three-strikes' rule after a high court judge ruled that the country's laws can not enforce disconnection from the web.

Four of the biggest record labels: Warner Music, Universal Music Group, Sony BMG and EMI, started the legal action against UPC in a bid to force to the Irish ISP to cut-off customers thought to have taken part in illegal file-sharing.

Justice Peter Charleton admitted a "substantial portion" of UPC's 150,000 customers were illegally file-sharing but the laws are not in place to prosecute them. He also admitted this means Ireland is not complying with European law.

"This not only undermines their business but ruins the ability of a generation of creative people in Ireland, and elsewhere, to establish a viable living. It is destructive of an important native industry," he said.

Under a 'three-strikes' rule, those accused of illegally downloading will be issues with warning letters and emails. Repeat offenders will could see themselves cut-off or suspended from the web.

UPC said it has "repeatedly stressed" it does not condone piracy and "has always taken a strong stance against illegal activity on its network".

"Today's decision supports the principle that ISPs are not liable for the actions of internet subscribers".

The ISP said it would continue to co-operate with rights holders the government and other ISPs to combat net piracy.

Earlier this year, Eircom settled out of court after the Irish Recorded Music Association (IRMA) - a trade association composed of such record labels as EMI, Sony, Universal Music Group and Warner Music Group - bought legal action against the ISP regarding its customers that had illegally downloaded.

As part of the settlement, Eircom agreed to a three-month trial where web users that repeatedly illegally download are cut off from the net.