As 2008 began, the international music industry was proudly predicting the dawning of a new age of co-operation between rightsholders, Internet companies and governments. The dynamic new President of France, Nicolas Sarkozy, together with Denis Olivennes, the head of France's largest consumer electronics and media retailer, had announced a new policy of "graduated response" for the French Net. Users accused of repeated copyright infringement online would be first warned, then suspended from the online world, and finally banned for a year if they did not tow the line. Music industry representatives heralded it as a model that should be imitated across the globe: in IFPI's 2008 report, its CEO John Kennedy said this was the year that "ISP responsibility" for protecting the music industry "becomes a reality".

Six months on from the original Olivennes report, with growing objections across Europe, collapsing support for Sarkozy's administration at home, and still no "three strikes" law on any statute books, the entertainment industry is getting a little antsy. Last week, the French RIAA, le Syndicat national de l'édition phonographique (SNEP), announced a deadline to Sarkozy's ministers. Hervé Rony, SNEP spokesman, said "it would not be acceptable" for the three strikes law to miss the French Parliament's Summer schedule.

It looks like SNEP's demands are not going to be met. Before the "Loi Olivennes" can even reach parliament, it has to be examined by the French Counseil d'Etat, the senior jurists that advise the French executive and acts as France's supreme court.

They are not rushing their analysis. Just why might be gleaned from the leaked copy of the law sent to them for consideration (provided by Squaring the Net in French). Even after being moderated from earlier drafts, the document still describes a stunning shift in judicial and enforcement, both offline and on.

After explaining exactly why drastic measures are necessary (to "prevent the hemorrhaging of cultural works on the Internet") 1 the document outlines a powerful new government body, the High Authority for the Distribution of Works and the Protection of Rights on the Internet (La Haute Autorité pour la diffusion des œuvres et la protection des droits sur Internet, or HADOPI).

As judge, jury, and executioner of "three strikes", HADOPI is born with wide-ranging powers over all French Internet users. The High Authority acts on reports of suspected infringement from rightsholder groups. Based on those accusations alone it can contact, warn, suspend and finally deny Net service to any French citizen. The High Authority has the right to obtain and peruse a year's worth of personal records from ISPs in the pursuit of their targets. They can order ISPs to include new filtering systems into their infrastructure, and can fine them up to 5,000 euros if they provide Net service to anyone on placed on the Authority's national Internet blacklist.

French Net users do not only have a new Authority sitting in judgment over them: the Loi Olivennes also requires them to police their own networks for the benefit of rightsholders. They will have an obligation to oversee their own network for Internet copyright infringement, and are liable for any infractions, even by strangers. Your only defense against the HADOPI guillotine is if you install on your home network one of their recommended "security devices". It's unclear what these may be: at minimum, it will be software to lock down your network shared drives, and ensure you never open your Wi-Fi again. The stage is set, though, for the government to recommend for home use the fingerprinting and monitoring systems that the copyright cartels are trying to push on YouTube and the phone companies. (And if you think such spyware at home is unlikely, remember that NBC recently pressured Microsoft to include such filters on your MP3 player).

If HADOPI's powers to cut users off, create government-required spyware at the ISP and home level, and pry into the private records of ordinary French citizens at the behest of a few music and movie companies seems draconian, you're not alone. This week, the French Internet trade group ASIC, which includes AOL, Yahoo, Google, Wikipedia, MySpace and others, wrote to the Ministry to complain about the disproportionality and injustices in the HADOPI procedure.

The beleagured Sarkozy administration (the President's support is now at 28%) is facing a great deal of criticism on many policy fronts, is looking at a packed legislative agenda for the Summer, and needs to divert executive resources for the upcoming French presidency of the EU. The last thing it wants to do now is to attempt to rush through a proposal that is deeply unpopular with both the public and business for the benefit of a single industry.

Three strikes is still on the agenda, both at the Élysée and in the recording industry's talking points. But its continuing rough ride through the French political system should stand as a warning to any other nation seriously considering it as a policy.

• 1. And, incidentally, misleads the Counseil d'Etat as to how widely the Olivennes proposal is being imitated elsewhere. The document claims that Canada is considering "three strikes", and that the United States has already implemented a similar solution as "a result of agreements between ISPs and rightsholders". Neither is true.