The digital economy bill is expected to be pushed through before the general election in May, according to senior media figures.
If industry predictions are right, the controversial measures that will enable rights owners to restrict internet access of illegal file-sharers could become law within months.
The bill, which is an attempt to reduce online piracy, will force internet service providers such as Virgin Media to pass on information about users who persistently download films and music illegally to rights holders.
The House of Lords has already voted against one of the most controversial aspects of the proposed bill, although campaigners have complained that they have replaced it with a clause which is just as contentious.
The Liberal Democrats added a clause that gives a high court judge the power to issue an injunction against a website that host a substantial amount of copyright-infringing material.
The House of Lords is due to make its final amendments to the legislation before it is passed to the House of Commons in two weeks time.
Last year, the Carphone Warehouse-owned internet service provider TalkTalk, which is the second largest ISP in the UK with 4 million customers, threatened to take legal action over the plans.
At the time, Andrew Heaney, the executive director of strategy and regulation at TalkTalk, said: “The approach is based on the principle of ‘guilty until proven innocent’ and substitutes proper judicial process for a kangaroo court. We know this approach will lead to wrongful accusations.
“If the government moves to stage two, we would consider that extra-judicial technical measures, and would look to appeal the decision [to the courts] because it infringes human rights. TalkTalk will continue to resist any attempts to make it impose technical measures on its customers unless directed to do so by a court or recognised tribunal.”
BT also said it is “concerned” about the government’s proposals and is interested to know whether consumers will have a fair legal hearing before any action is taken against them.
Virgin Media added: “New and compelling legitimate services are the only way to persuade a generation that has grown up with “free” to give up illegal downloading. Relying on coercion in the absence of these alternatives will fail and alienate large swathes of mainstream internet users in the process.
“The government’s new proposals look like a broadly balanced approach but their success will depend on whether they are implemented in a way that encourages innovation and ensures consumers get the services they want as quickly as possible.”
The Conservative party is opposed to the bill.