Lord Mandelson is seeking to amend the laws on copyright to give the government sweeping new powers against people accused of illegal downloading.
But Labour colleagues are concerned that if he succeeds it could give a future Tory government the ability that Rupert Murdoch wants to quash Google.
In a letter to Harriet Harman, the leader of the house and head of the committee responsible for determining changes to such legislation, Mandelson says he is "writing to seek your urgent agreement" to changes to the 1988 Copyright, Designs and Patents Act "for the purposes of facilitating prevention or reduction of online copyright infringement".
By writing to Harman, the business secretary is seeking to get the change made through a "statutory instrument" – in effect, an update to the existing bill that the government can push through using its parliamentary majority.
That can be done with the minimum of parliamentary time, which is already at a premium.
The letter, which is circulating inside the government, comes as ministers prepare to publish the digital economy bill at 7.30am tomorrow. That is expected to set out a "three strikes" policy under which people who are found to be illicitly downloading copyrighted material have their internet connections withdrawn after three warnings.
Internet service providers have warned that the scheme is unworkable and unlawful.
The proposed alteration to the Copyright Act would create a new offence of downloading material that infringes copyright laws, as well as giving new powers or rights to "protect" rights holders such as record companies and movie studios – and, controversially, conferring powers on "any person as may be specified" to help cut down online infringement of copyright.
The changes proposed seem small – but are enormously wideranging, given both the breadth of even minor copyright infringement online, where photographs and text are copied with little regard to ownership, and the complexity of ownership.
Mandelson says in his letter that he is concerned about "cyberlockers" – websites that offer users private storage spaces whose contents can be shared by passing a web link via email.
"These can be used entirely legitimately, but recently rights holders have pointed to them as being used for illegal use," Mandelson writes in the letter.
But the proposal to alter the Copyright Act in this way has caused alarm within government, where some fear that an incoming Tory administration could use it to curry favour with Murdoch, head of the News International publishing group.
"They've seen that file-sharing is essentially unpoliceable, but the net effect is that a future secretary of state could change copyright law as they see fit," said one Labour insider.
In his letter, Mandelson sets out the expected reaction from the three groups who would be affected by the changes: rights holders such as record companies, internet service providers (ISPs), and consumers.
"I expect rights holders to welcome this and to support it. ISPs are likely to be neutral until it is clear what effect it will have on them in terms of costs." Consumer groups "are likely to oppose [the move] but will see it may lead to further unquantifiable measures against infringing consumers."
He also expects "a great deal of scrutiny" of the idea in parliament.
Murdoch has recently said that he believes that copyright is being abused, particularly by organisations such as Google, which uses short extracts from online newspapers to create its Google News page, and the BBC, which he has accused of "stealing from newspapers".
Earlier this month Murdoch was vituperative about how search engines have aggregated news. "The people who simply just pick up everything and run with it – steal our stories, we say they steal our stories – they just take them," he said. "That's Google, that's Microsoft, that's Ask.com, a whole lot of people ... They shouldn't have had it free all the time, and I think we've been asleep."
By giving the business secretary the power to amend the Copyright Act at will, Labour fears Mandelson could be creating a Trojan horse that under a Tory administration would allow Murdoch to be rewarded for his support for David Cameron over Gordon Brown, for example by making it illegal to use such extracts from a news site for profit.
A spokesperson for the Department for Business said the department could not comment on correspondence between ministers.
@'The Guardian'
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