A report, commissioned by the Government, has concluded that the copyright laws in the UK need to be modernised to allow innovative companies to flourish and the economy grow.

But it stops short of saying that Britain should adopt the US law of "fair use" - which allows for the limited use of copyright material without having to ask the rights holders.

Professor Ian Hargreaves, who carried out the review, said the government must make far reaching reforms.

"The laws need to be changed in order to make sure that copyright does not intentionally get in the way of the creation and development of all kinds of businesses that are arising out of the internet," he told Sarah Montague.

"It's a whole new piece of the economy and we're in real danger of stifling it in Britain if we don't change our copyright law."

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