The government has hosted a roundtable discussion with leading ISPs and media companies, including EMI Music and Warner Bros, to discuss new and legal ways in which people can access content hosted online.
The talks were chaired by culture secretary Jeremy Hunt and communications minister Ed Vaizey.
"I am pleased to hear that real progress has been made by ISPs and the music industry on developing new and attractive services for consumers. The more choice consumers have, the less attractive the unlawful alternatives will be," said Hunt.
Vaizey said that he is "delighted" with the progress being made between the two sides, and that all affected organisations must be involved in the debate given how closely linked their roles have become.
"The nature of the internet means that the creative industries, ISPs and others such as Google and Yahoo are completely interlinked. They need each other for sustainable future success," he said.
"Consumers demand choice. It is essential that new legal methods to access films, music and other content online are developed while enabling creators' copyright to be properly protected."
A spokesperson for BT said that the discussions are important for the industry, and that BT welcomed the government's proactive approach.
"It is right for ministers to encourage dialogue between industry and government on issues relating to the digital economy, given the significant role it plays in the economy overall," the spokesperson said.
Google confirmed that company representatives had attended the meeting, but had no comment to make.
ISPs and rights holders have long been battling over issues related to copyright. The Digital Economy Act has been repeatedly criticised by firms like TalkTalk for forcing ISPs to become "internet police".
TalkTalk and BT are to challenge the Digital Economy Act at a court hearing on 22 March, after judges upheld complaints that the legislation does not adhere to European law.
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