A minister has raised the prospect of multi-million pound fines for social media companies that fail to police their sites, revealing that the Government is carefully studying a German law that punishes firms that fail to delete online abuse.

Margot James, the minister for digital and the creative industries, said that Government officials will travel to Berlin next month to examine recently-introduced legislation that forces internet firms to delete illegal posts within 24 hours or face fines of up to £44m.

She opened the door for technology companies to improve their behaviour through self regulation, saying it would be a “very good step”, but warned that regulation is on the table if they refuse to clean up their act.

“We’re looking with great interest at the situation in Germany,” Ms James told the Advertising Week Europe conference in London . “We are looking at all these things to see if we have to go further, how might that look.”

Supporting the idea of a self-regulatory body similar to the newspaper industry regulator IPSO, Ms James said: "Either we can make that work voluntarily with the networks or we will have to go to a more statutory framework. We can’t go on with the abusive behaviour, with the freedom to assist people into self harming states to the point of suicide, anorexia, there’s so many areas where there’s a need for greater protection of people."