A bizarre new scheme to deter people from pirating movies and music in the UK has launched, with illegal downloaders set to receive emails and letters asking them to stop. Despite pressure from copyright holders to introduce fines and legal threats, the new system will ask people to stop four times and then do nothing.

The compromise between ISPs and copyright holders was first leaked back in May . Under the terms BT, Sky, TalkTalk and Virgin Media will send "educational" emails and letters to people caught downloading illegally, with the first being sent in early 2015. After four warnings have been sent to one account no further action will be taken. Each year four further letters can be sent out, with no fines or punishments for repeat offenders.

The scheme was unveiled by business secretary Vince Cable, who also confirmed that the Government was pledging £3.5 million to explain to people why piracy was bad . "Education is at the heart of this drive so people understand that piracy isn’t a victimless crime - but actually causes business to fail, harms the industry and costs jobs."

Copyright holders and ISPs have squabbled for four years over how to tackle piracy. The 2010 Digital Economy Act had called for internet access to be cut after a series of warnings were sent, but this proved too controversial. Rights holders initially wanted letters to threaten legal action, while there were also demands for a vast piracy database with rights holders given access to details of illegal downloaders.

The new scheme, known as the Voluntary Copyright Alert Programme (Vcap) will warn that piracy is illegal but the main purpose of the letters will be to educate people. Geoff Taylor, chief executive of the the British music industry's trade association (BPI), said letters and emails wanted to ensure that artists are "fairly rewarded":

"This landmark initiative marks the first time that entertainment companies, broadband providers and the government have come together in a major campaign to engage consumers through their passion for music, film, TV and other content and to support them in enjoying it safely and legally online."

The UK Government is comparing its scheme to a similar 'six strikes' anti-piracy deal in the US. The US Copyright Alert System sends out six warnings, after which persistent offenders may have their internet access limited but not cut. Under the US schemes people who ignore warnings could have their connection slowed down or be forced to take a "copyright education program". The system in the UK will only ever tell people that piracy is bad, with internet connections never cut or slowed.

The warning letters and emails in the UK will coincide with a new three-year campaign to raise awareness of copyright infringement and promote use of legal services. Full details of this campaign are yet to be announced.

ISPs and rights holders have all come out in support of the new deal, with Sky saying it was crucial to protect "future investment in content". Dido Harding, CEO of TalkTalk said that the new gently-gently approach would help customers find legitimate ways of watching movies and listening to music:

" This voluntary agreement, combined with the accompanying consumer awareness campaign, means that customers will have the information they need to make the right choices about how they access content," she said.

The move also has cross-party support, with shadow culture secretary Harriet Harman welcoming the decision by rights holders and ISPs to work together:

"W e need to ensure that talented UK creators and digital innovators see a continued financial return from online services for their ideas and efforts. I hope this initiative will encourage greater uptake of digital services and more responsible use of the internet."