Sharman, which operates the Kazaa peer-to-peer file sharing service, was ordered to develop a new version of its software with a filtering system to block searches for 3,000 keywords, and to urge its users to download the new version.

Instead, the firm has put in place a warning for its Australian users that "The download of the Kazaa Media Desktop by users in Australia is not permitted".

Responding to the move this week, chief executive of the Australian Recording Industry Association (ARIA), Stephen Peach observed that:

"It is apparent that they never had any intention of applying filters, the bare minimum they needed to continue to operate the system. Their response is an insult to the court, the public and all artists whose work is being illegally traded on their system."

However, Sharman countered by announcing in a statement that:

"The judgement pertained to the authorization of copyright (infringement) in Australia. All activity that could be deemed as authorizing has stopped so as to comply with the court orders, pending the imminent appeal in February."