Sir Elton John has come out in support of measures to crack down on music piracy by cutting off the internet connections of persistent illegal filesharers.

In a letter to the business secretary, Lord Mandelson, he said: "I am of the view that the unchecked proliferation of illegal downloading (even on a "non-commercial" basis) will have a seriously detrimental effect on musicians, and particularly young musicians and those composers who are not performing artists."

The letter comes as talks to heal a growing rift in the music industry over piracy broke down today , with a group of artists including Pink Floyd's Nick Mason, Billy Bragg and Tom Jones accusing labels of stubbornness.

The artists are part of the Featured Artists Coalition, whose members also include Annie Lennox and Blur's Dave Rowntree. The FAC took the rest of the music industry by surprise by publicly announcing that it has "agreed to disagree" with labels over government proposals to suspend the internet connections of persistent filesharers.

But the debate is also dividing big-name artists, with Lily Allen, James Blunt and John, all taking issue with the views of the FAC.

Frantic talks over the last week between record companies, music lobby groups and the FAC have failed to reach a consensus on Mandelson's planned law ahead of a consultation deadline for comments next week.

The FAC said in a statement: "We have negotiated in good faith with the labels all week, but they remain wedded to the idea of suspension of accounts. We remain steadfast in our belief that making threats against individual music fans is not an effective way to resolve any problems associated with filesharing."

Many internet service providers and consumer groups share concerns over how such laws would be enforced, with the risk of the penalising innocent internet users. But more and more artists are coming out in defence of legal measures, echoing labels' comments that filesharing is hampering investment in new acts.

There are fears within the industry that the public divisions between artists could derail the long-running fight against piracy just when new laws are close.

Lily Allen has set up a blog titled "It's Not Alright" (in reference to her first album Alright, Still) collating the views of artists after her own comments that "filesharing is a disaster" for new talent.

James Blunt has also now waded in, welcoming government proposals. "Peter Mandelson is looking to engage the internet service providers who, in my opinion, handle stolen goods, and should take much more responsibility," he wrote in a letter to the Times.

"How this legislation pans out, and if it goes through at all, is critical to the survival of the British music business; critical to thousands of jobs; and critical to our ability to nurture and develop great musicians and the songs and albums that we would hope to listen to in the future."

Allen condemned FAC's Mason and fellow coalition member Ed O'Brien from Radiohead, for implying "file sharing music is fine".

She added: "It probably is fine for them. They do sell-out arena tours and have the biggest Ferrari collections in the world."

Allen attacked the FAC's stance: "I want to make it clear that I'm not after a fight with the Featured Artists Coalition – I want us artists to stand together on this – but they've released a new statement which just doesn't make sense. The FAC seems to be viewing the government's proposed legislation as an attack on freedom and liberty, but stealing's not really a human right, is it?"

The FAC said it had been misinterpreted. The coalition described as "maverick" by some in the industry went on record citing "evidence that repeat file-sharers of music are also repeat purchasers of music".

But it argues today that its opposition to broadband suspension for repeat filesharers has been taken to "imply that we condone illicit file-sharing. This is not the case and never has been."

"However, we seriously question the wisdom of seeking to deal with this problem by terminating the internet connections of individual music fans."

They demand government action on websites that make money from illegal filesharing, which they describe as "thieving rascals".

"The focus of our objection is the proposed treatment of ordinary music fans who download a few tracks so as to check out our material before they buy. For those of us who don't get played on the radio or mentioned in the music media … peer-to-peer recommendation is an important form of promotion."