THE DATE is 1 November 1994 - two weeks tomorrow. The managing director of a London PR company arrives at work to find two lawyers waiting for him, armed with court authority to enter the premises and search his firm's computers for illegally copied programs. Two hours later, the investigation completed, the MD faces a choice: either to pay pounds 7,000 for software that his employees have illegally copied, or to be taken to court, risking public disgrace and a possible fine.

This is the spectre raised by the crackdown launched last week by the Business Software Alliance, an international association of mainly US software houses. The BSA believes Europe is now responsible for more financial losses from 'software piracy' - illegal copying of computer programs - than either North America or Asia; and that most losses come not from home copying or counterfeiting, but from businesses that buy one copy of a program and install it on many machines.

Following a successful anti-piracy campaign in Spain, and changes to the law in Germany and Italy, the Alliance is now targeting Britain. It has set up a Software Crimeline (0800 510510), and is offering rewards of up to pounds 2,500 for informants who shop their own employers. Will the scheme work?

Whistle-blowers will not be able to remain anonymous, for the legal process depends on their providing an affidavit, which the accused company has the right to see. Yet this need not be an obstacle: although loyal employees may not wish to harm their promotion prospects, those who have been sacked may be more ready to reveal wrongdoing. Other potential informants include consultants, who may discover illegally copied programs while visiting, and temporary workers. In New York, where a similar programme has long been in operation, one temp reported three different companies for software piracy in a single week.

The potential gains to the industry if it can exact full payment for all software in use are huge - dollars 12.8bn ( pounds 8.1bn) each year worldwide, according to comparisons between sales and surveys of software actually installed on PCs. The scale demonstrates that software offers greater temptation to the pirate than music or books. Software copying is quicker and cheaper, and results in no loss of quality. That helps to explain why the BSA believes the piracy rate is just under 50 per cent even in Britain, and is 90 per cent or more in 15 other countries.

Paradoxically, software houses already have the technical means to protect their property. Programs are available to prevent more than one copy being made from each set of diskettes, and even to instruct software to 'self- destruct' on a given date if the customer fails to register the program as legitimate with its creator by mail or fax.

DeScribe, a word-processor company based in Sacramento, California, last month warned that copies of version 5.0 of its program will self-destruct on 28 February next year unless they are registered. The firm's chairman has defended the decision, saying: 'I can't stomach being in a business where I am not paid for my work.' His legitimate customers are less keen on the idea, however; messages criticising the policy have been posted on bulletin boards. Competitors are equally suspicious. One analyst said the firm had shot itself in the foot.

The problem is that most corporate pirates are also customers, whom it would be dangerous and perhaps counterproductive to alienate. That is why the BSA's campaign is in fact less pugnacious than it seems. During the two days after the crime line was first publicised last week, its operators received 30 calls - but told its informants to ring back next month if they wished to be paid a bounty. The hope is clearly that the publicity generated by the crime line will encourage enough firms to set their houses in order to make legal action unnecessary.

In the United States, friendly persuasion has accompanied policing. In one campaign, the BSA posted billboards with the slogan 'Copy software illegally, and you could get this hardware absolutely free' - the hardware being a pair of handcuffs. It also released a record containing a rap song called 'Don't copy that floppy'.

There are other ways to discourage piracy. The most obvious route - cutting retail prices - - has already begun: many packages sold last year for pounds 200 in Britain and dollars 200 in the US today cost half that. Another is via customer support. Many software houses now take greater care to establish that those who call in with questions have paid for their software.

But these steps may do little to reduce the future piracy risk from the Internet, where illegal copies of programs posted on bulletin boards can be downloaded by hundreds of people before they are detected. Earlier this year, a computer-science student at the Massachusetts Institute of Technology was indicted by a US federal grand jury for allowing software worth dollars 1m to be stolen via a private bulletin board. The outcome of the student's trial - he risks a prison sentence and a dollars 250,000 fine -will be watched closely by most of the world's leading software houses.