A leading law firm is being investigated over claims that it bullied and harassed hundreds of people wrongly accused of illegal filesharing.

The Solicitors Regulation Authority, an industry watchdog, said it is investigating a complaint brought against Davenport Lyons, the London-based solicitors' firm that has led a number of prosecutions against illegal filesharers.

The consumer group Which? first made an official complaint in 2008, after a number of people contacted it to say that they had received letters from Davenport Lyons demanding payment for illegal downloads that were nothing to do with them.

Which? said that the letters - which usually threatened legal action if immediate payments of hundreds of pounds were not made - were "excessive" and often rested on little evidence of wrongdoing.

Earlier that year, the firm was instrumental in securing the country's record ruling against an alleged filesharer - a £16,000 judgment against a London woman accused of illegally downloading a pinball game worth £26.

Shortly afterwards, the company launched an anti-piracy campaign that involved sending letters to thousands of people accusing them of illegally downloading games, movies and pornography.

But the nature of that action was the subject of heavy criticism when many alleged downloaders said they were wrongly targeted.

The Guardian reported the case of a couple in their 60s who were accused of illegally downloading a pornographic film - despite the fact that they do not know how to do so, while the BBC also reported that similar accusations had left people feeling "upset, scared and angry".

Deborah Prince, the head of legal affairs at Which?, said that she was pleased by the investigation - even if the complaint has taken more than a year to come under consideration.

"We're pleased to see some action at last from the SRA and hope the tide is finally turning in favour of consumers," she said. "We now want to see some decisive action to stop these bully-boy tactics."

A representative of Davenport Lyons was unavailable for comment - but in the past, the firm has said that the accusations are "simply wrong".

The news comes as the House of Lords considers the hotly-contested digital economy bill - which could give ministers the power to disconnect alleged filesharers and let the courts block websites containing copyright-infringing material.

On Wednesday a series of changes were pushed through which turned up the pressure on the already-contentious bill. While the controversial clause 17 - which potentially gave parliament the right to change copyright law - was dropped, a new amendment was added which critics say could end up with major websites such as YouTube being unfairly blocked by internet service providers.

The music industry welcomed the move, which they said was a step in the right direction.

"We are pleased that parliament have recognised that legislation to tackle non-peer-to-peer piracy needs to be as robust as that planned to limit peer-to-peer," said a spokesman for the BPI, Britain's record industry association.

However the Internet Service Providers' Association said that it was "outraged" by the changes, which it said were "hastily constructed".

Under the new proposals, the high court could force ISPs to block websites containing "substantial" amounts of copyrighted material if the rights holder demands it - regardless of whether the website had any knowledge of the actions of its users.

"ISPA has been supportive of peers' excellent scrutiny of the bill to date," said Nicholas Lansman, the organisation's secretary general. "However, in this instance, our members are extremely concerned that the full implications of the amendment have not been understood and that the reasoning behind the amendment is wholly misguided."