Music fans illegally downloaded more than one billion tracks this year, according to figures released on Thursday.
A report published by industry body BPI found 7.7 million people had illegally downloaded music worth almost £1 billion.
BPI chief executive officer Geoff Taylor compared illegal downloading to “a parasite”.
The report, called Digital Music Nation 2010, found 1.2 billion tracks were illegally downloaded in 2010.
Legal downloads are on the increase, with digital tracks now accounting for 24.5 per cent of recorded music revenue, up from 19.2 per cent last year.
Mr Taylor said: “Digital music is now mainstream in the UK, with much to be proud of – nearly 70 legal services and a further increase in the numbers of digital singles and albums set to be sold online in 2010.
“Yet this growth is a fraction of what it ought to be. Illegal downloading continues to rise in the UK. It is a parasite that threatens to deprive a generation of talented young people of their chance to make a career in music, and is holding back investment in the fledgling digital entertainment sector.
“As the internet becomes central to many aspects of our lives, including how we access our entertainment, we must decide whether we can afford as a society to abandon ethical values we stand by elsewhere – that stealing is wrong; that creativity should be rewarded; that our culture defines who we are, and must be protected.
“The creative industries employ two million people in the UK and are the fastest-growing sector of the economy.
“Urgent action is needed to protect those jobs and allow Britain to achieve its potential in the global digital market. 2011 must be the year that the government acts decisively to ensure the internet supports creativity and respects the basic rules of fair play we embrace as a nation.”
The BPI predicted sales of digital singles could top 160 million this year, beating last year’s record of 149.7 million. It also expected around 21 million digital albums to be sold. This year the Black Eyed Peas’ I Gotta Feeling became the first single track download to sell more than a million copies.