France's parliament rejected the new ‘Creation and Internet Law’ that would have allowed Internet Service Providers to disconnect internet users who illegally download copyright material.
The Internet bill, which is backed by President Nicolas Sarkozy's government and heavily supported by the music industry, would give users caught illegally downloading files two warnings and then, after a third breach, have their internet connection disconnected for up to a year.
Although the ruling UMP party backed the bill, many of its MPs were not present at the time of the vote. The Bill which had already passed through France's lower house was rejected by 21 votes to 15, following strong opposition from the Socialist party.
The government plan to re-submit the bill. It will now be put in front of the Assembly for a second time after parliamentary recess on the 27th of April.
Governments, under pressure from a struggling music industry, have long been trying to crack down on online file-sharing.
"The proposed law is an effective and proportionate way of tackling online copyright infringement and migrating users to the wide variety of legal music services in France," said John Kennedy, chairman and chief executive of IFPI, a music industry group.
The music industry has been lobbying for similar laws to be introduced around the world. In January, Irish Internet provider Eircom agreed to disconnect users who download music illegally in a settlement with four major record companies.
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