A crackdown on car boot sales, where counterfeit CDs, perfumes and other fake goods are regularly sold, was among the recommendations of the Government-commissioned review of intellectual property rights published yesterday.
The study, by Andrew Gowers, the former editor of the Financial Times, called for new powers against infringement of copyright but also advocated some new rights to consumers - which provoked criticism from the record industry.
Mr Gowers said: "The ideal IP [intellectual property] system creates incentives for innovation, without unduly limiting access for consumers and follow-on innovators.
"It must strike the right balance in a rapidly changing world so that innovators can see further by standing on the shoulders of giants. And it must take tough action against those who infringe IP rights at a cost to the UK's most creative industries."
The Government, which has emphasised the economic importance of knowledge-based and creative industries, welcomed the findings of the review and indicated that its recommendations would be implemented. Mr Gowers came out in favour of reform of the current system, rather than a fundamental overhaul.
The review said: "Ideas are expensive to make but cheap to copy. Ideas are becoming even cheaper to copy and distribute as digital technology and the internet reduce the marginal cost of reproduction and distribution towards zero."
Mr Gowers recommended that copyright protection for sound recordings be kept at the current 50 years - the music industry had sought 95 years - and he also called for an exception to be made to the law to allow private copying, so-called "format shifting". That would, for instance, allow consumers to legally copy, for the first time, a legally bought CD on to their iPod or MP3 player. Mr Gowers described the current prohibition as a "stupid anomaly".
That was not how some of the music industry saw it. One sector organisation, AIM, which represents independent record labels, said: "We believe Mr Gowers may well be opening the floodgates to uncontrolled and unstoppable private copying and sharing from person to person, as well as format to format. Once owned, however acquired, music will be passed on freely."
Mr Gowers report said that the review had "not shifted the load of what consumers pay in the direction of producers".
He said that extending copyright of music recording beyond 50 years would have only benefited "an exceptional few stars, who are already fabulously rich". Cliff Richard was one of number of such singing stars who had campaigned for the 45-year extension.
The report also suggested that the Office of Fair Trading ought to investigate the operation of "collecting societies", which gather payment for the playing of copyrighted music, from radio stations, hairdressers and other businesses that play music.
Among the 54 recommendations contained in the 146-page review was tighter regulation against "occasional sales and markets" - that is car boot sales and street markets. Mr Gowers said that these were a major route for counterfeit goods to reach the public and that serious organised crime, such as drug traffickers, were involved.
The Government responded yesterday by immediately pledging new powers and duties for trading standards officers, covering copyright and piracy, together with £5m of extra funding. This will be partly used by trading standards to regulate such markets.
Mr Gowers proposed that the penalty for online piracy be extended from two to 10 years, in line with physical piracy, and this would make illegal digital copying an arrestable offence for the first time.
He said that internet service providers must take action against online pirates and, if that did not happen, the Government should consider new legislation to compel them to do so by the end of 2007.
The Gowers review called for the UK Patent Office to be restructured as the UK Intellectual Property Office. It also suggested a new organisation, a strategic advisory board for IP policy, which would report directly to ministers.
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