Britain will damage its economy if it does not follow France and clamp down on Internet piracy, the boss of entertainment and telecoms group Vivendi said on Tuesday.

Britain's media and telecoms industries have been engaged in a heated debate for 18 months over whether Internet service providers should be obliged to disconnect customers who illegally download movies and songs -- with little agreement.

France recently passed a three strikes law under which illegal downloaders receive two warnings. If ignored, a judge could then cut off their Internet access for up to a year.

Jean-Bernard Levy, the chief executive of France's Vivendi, which is both a content maker and Internet service provider (ISP), said the French decision was the right move and that telecoms groups were missing the point.

At Vivendi, we are in the content business, we are in the telecom business and there is no internal debate, he told a British government-sponsored forum on the creative industries.

The priority is not to grow ... traffic on the ISPs. The priority is that creators, people who develop content, should find a way (to be rewarded).

Britain's creative industries were worth an estimated 60 billion pounds ($98 billion) in 2006, or over 6 percent of the economy, but have been damaged in recent years by the relentless rise of illegal downloading.

Appeals for the Internet service providers to intervene have mostly fallen on deaf ears, with telecoms groups such as BT and Carphone Warehouse objecting to playing the role of Web policemen.

Levy said that was shortsighted and would leave ISPs spending vast sums on upgrading their networks, simply to carry illegal traffic.

It seems to me so obvious that Britain should be even more in favour of protecting and developing its media industries, its own heritage, he said, commenting on Britain's strength in the arts, music and movie industries.

The British government has said it is considering ways of tackling unlawful peer-to-peer file sharing, such as blocking access to download sites, reducing broadband speeds or temporarily suspending an individual's Internet account.

But executives have accused the government of moving too slowly.

(Reporting by Kate Holton and Georgina Prodhan, editing by Will Waterman)