President Sarkozy finally gets the green light to equip France with the world's first internet police agency today. Parliament is approving a novel law against illegal downloading three weeks after an embarrassing defeat when most of Mr Sarkozy's members failed to turn up to vote.

The music and film industries are cheering over what they see as the most decisive attempt anywhere to stave off the theft of copyright entertainment. However new "creation and internet law", due to take effect in the autumn, is contested by rights groups, some artists and some of Mr Sarkozy's own camp. They call unfair, unworkable and out-of-date.

The heart of the scheme is a state agency which will track people who download entertainment without paying - that is, about half of French internet users. The new "high internet authority", known from its initals as Hadopi, will send three warnings to customers whose lines are used for illicit downloading. It the "piracy" continues after that, the customer's access will be cut off for up to a year.

The critics say that the law creates an internet Big Brother who will hit innocent people whose web access is being used by others, such as their children, employees or people hooking into their WiFi. Any knowledgeable youngster will be able to disguise their IP, the internet address that will be used to identify offenders, they said.

A group of directors and actors including Catherine Deneuve and Victoria Abril signed a protest last month, calling the law "demagogic, inapplicable and stupidly ignorant of new ways of downloading" creative work. One internet campaign group called Quadrature du Net says that cutting off internet access amounts to the imposition of a "social death sentence" by non-judicial means. Artists who back the scheme are foolish, they say, because they are casting themselves as opponents of the young who are their main fans.

Le Monde newspaper mocked the scheme as typical of the traditional French belief that the state should play a role policing culture. The bosses of the entertainment industry are behaving like the mediaeval monks who raged against Gutenberg's invention of the printing press, it said. All the critics argue that the industry's future lies in finding new ways of earning income from entertainment rather than enforcing an obsolete system.

Mr Sarkozy and the industry dismiss this as nonsense. Carla Bruni, his singer wife and a platoon of entertainment and retail tycoons convinced him of the urgent need to act against what he calls "the lawless wild west of the internet". The rightwing President commissioned Denis Olivennes, the former head of the FNAC entertainment retail chain, to think up the scheme. Hollywood's moguls like it so much that they cited it to the US Congress last month as a model for combating piracy.

Mr Olivennes is depicting the law as leftwing because it is designed to save creative artists. "The unregulated internet means the death of artistic diversity," he said. The law's drafters are insisting that new technology will be able to keep up with rights evaders and that the new agency is in keeping with the new global mood in favour of more regulation.

There is a chance that Mr Sarkozy's agency may be sabotaged before it opens. This could happen if the Socialist opposition succeeds in a promised appeal against it to the Constitutional Council. Trouble is also brewing in Brussels because sections of the European Parliament and the Commision say that the agency will breach European principles on citizens rights.

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