Illegal filesharing has cost the British music industry £1.1 billion over the past three years despite the rise in legal online stores, it was claimed today.

The international record industry announced 2,000 new legal cases against individuals suspected of uploading large amounts of copyrighted music. File-sharers in Denmark are the first to face automatic disconnection by internet service providers.

The British music industry lost £414 million last year as a result of the illegal swapping of music on the internet. The loss increased from £376 million in 2004, despite the percentage of the UK population illegally filesharing falling slightly.

According to the British Phonographic Industry (BPI), the dent to record company coffers has increased because those who still download would be the individuals expected to spend the most on music.

To date, the BPI has settled more than 100 of the 138 cases it has brought against alleged UK filesharers. It says 56 per cent of those starting to download in the past six months are downloading legally.

The percentage of downloaders using legal services only has more than doubled from 11 per cent in 2004 to 23 per cent in 2005.

Peter Jamieson, BPI Chairman, said: "Too often people believe that when they take music illegally over the internet it is a victimless crime. But when people share music files illegally, they are stealing the future of British musicians and the people who invest in them."

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