Rory Cellan-Jones

When I walked into Charles Dunstone's office at Carphone Warehouse's giant blue shed on a West London trading estate, he was in fighting mood. Brandishing a document, he told me: "They've sent us the most unbelievably rude letter." They were the BPI - the music industry's trade body - and Mr Dunstone, whose TalkTalk business is Britain's third biggest internet service provider, saw that letter as a declaration of war.

The BPI has been writing to all the big ISPs with a proposal. It wants them to warn their users that file-sharing is not an acceptable activity - and then disconnect those who ignore repeated warnings to desist. The ISPs don't like the idea of chucking out customers - but they and their trade association have been keeping a low profile on this issue. Not so Carphone Warehouse. Charles Dunstone was so angry about that letter, which he says threatened legal action if he didn't comply with the BPI's demands within 14 days, that he issued a call to arms. "TalkTalk rejects music industry threats and refuses to become internet police" said the press release that came hurtling out of that shed in Acton.

Mr Dunstone is angry for two reasons - he doesn't want to start telling his customers how to behave, and he thinks the music industry is trying to make him pay the price for its failure to adapt to the digital age. "They're not just shutting the stable door after the horse has bolted - the horse has left town, got married, and started a family."

So what's the other side of this story? Well the music industry thinks Carphone Warehouse is being mischievous. The BPI has issued an equally combative press release which says "TalkTalk either seek to misrepresent our position or just doesn't get it." The trade body says it is not asking ISPs to police the internet, but simply to act on evidence that it will provide about users who are engaged in music piracy.

Lurking in the back of this very noisy battle is the government. The BPI believes that it has convinced ministers that the ISPs need to play their part in the battle against file-sharing. Jeff Taylor of the BPI told us: "The government says if ISPs do not start helping to deal with this problem in a helpful way then there will be legislation."

Charles Dunstone says he will fight all the way against any move to make him cut off customers engaged in file-sharing - and he doesn't believe there is any chance that the government will bring in laws to force him to do that. Mr Dunstone is pretty well plugged in to the current government - so he's probably right. Ministers have been lobbied with some vigour on this issue by the music industry - but the BPI may find that supportive mood music from the government doesn't translate into new laws.