Aim represents Katie Melua's record company, Dramatica

The Association of Independent Music (Aim) has outlined the plans in a discussion on copyright reform.

Aim is concerned the internet has made it easier for people to share music and breach record firms' copyright.

The organisation wants a fresh approach to copyright law that would cover the role of ISPs in music sharing.

'Innovative answer'

The Aim-led initiative - which represents a wider group of musicians, music managers and record labels - wants to move away from bringing legal action against individuals who upload music to internet file-sharing services, and encourage the emergence of legal sharing services.

Ways of charging ISPs for acting as an "intermediary" between and music buyers is another area highlighted in the discussion, details of which were revealed on Wednesday.

This could take the form of a collective licence - similar to the current radio licence in the UK - which would allow ISPs to host file-sharing for a fee that would go to record companies and musicians.

Ultimately, the group wants the music industry to create a commercial relationship with any company deriving value from either the sharing or storage of music.

Chair Alison Wenham said the plans were the "most innovative potential answer" to issues in the music industry which current copyright law cannot deal with properly.

'Shirking responsibilities'

David Ferguson, chairman of the British Academy of Composers & Songwriters, said: "Professional composers and songwriters are only able to produce new music if they are paid for their work.

"For too long the ISPs have shirked their responsibilities, using music as a tool to sell their own services, whilst making little effort to ensure fair payment to its creators."

Aim's paper will be finalised and sent to an independent review intellectual property issues, including copyright, which was commissioned by the government and is led by former Financial Times editor Andrew Gower.

Mr Gower's team is due to report back to the government later this year.

'No liability'

The Internet Services Providers Association said its members do not support illegal activity on the internet, including copyright abuse.

It said people who use peer-to-peer file-sharing without paying royalties may be infringing the Copyright, Designs and Patents Act 1988.

"ISPs bear no liability for illegal file sharing as the content is not hosted on their servers," it said.

"Although such files may be transmitted across an ISP's network, ISPs are 'mere conduits' of information, as per the E-Commerce Regulations 2002.