The British record industry claimed today that it is winning the war against internet piracy, despite suggestions the major labels were slow to embrace the trend towards digital music.

The BPI announced that legal download music sales in 2005 have already passed 10 million – almost twice the level for the whole of 2004.

The organisation, which represents the major record labels in the UK, said the figures were proof that its campaign against illegal downloads, which has included bringing court actions against parents whose children illegally copy music online, was paying dividends.

"The battle against illegal filesharing will continue, but we are delighted to have hit this milestone so soon," it said.

The BPI added that the "growth in legal downloads was already outstripping the growth in illegal filesharing".

It argued that the number of illegal files available online had not expanded at the rate of broadband access across Britain. Meanwhile, the use of legal download services had exploded from a very small base, it said.

However, figures from online music analysts have shown that peer-to-peer (p2p) services, linked by the music industry to the illegal pirating of copyrighted music, have continued to increase in popularity.

According to data from Big Champagne, the American chart compiler that monitors downloads, the number of people using p2p sites rose from 3.8 million in August 2003, to more than 8.7million last month, and has continued to grow month by month.

The increasing uptake of peer-to-peer services has continued despite a US Supreme Court judgment broadly interpreted as a solid victory for the record labels against Grockster, a leading peer-to-peer site.

A spokesman for the BPI admitted that it was "very difficult" to track online music habits but said that it was happy that its central message – that downloading music for free is wrong – had become "a point of family discussion" following a string of settlements with parents.

Parents have been fined as much as £4,000 after children downloaded free music files over the internet.

The BPI also attacked "romantic" notions about file sharing. Some advocates argue that free peer-to-peer services offer users vast back-catalogues of hard-to-find tracks, which can be cherry picked according to a user’s own taste. The labels have lost out by neglecting to offer similar products, they say.

Richard Hitchcock, an analyst with Numis, the stockbroker, said: "There may be something in this. Record companies have not been successful in finding and developing fresh major talent in recent years. The industry has admitted it has what it calls ‘creative issues’."

EMI, the British record company, has publicly made unearthing new talent a priority, but has been criticised for an over-reliance on a few big names, such as Coldplay, Norah Jones and Gorillaz, to support sagging sales.

Industry insiders have said that with an average of 28,000 albums released in the UK each year, it is impossible for the record companies to place everything online and admit that the relatively new legal download sites are playing "catch-up". Illegal file sharers appeared to have filled the gap in the market in the interim.

Mr Hitchcock said: "Single events such as the Grokster victory are best seen as single battles in the ongoing war against illegal downloads. Online piracy is going to remain a problem for some time."

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