The operators of the Kazaa filesharing service have been given until 5 December to update their software with a filter to screen out copyright material or face the prospect of being shut down.

The filter will prevent users from trading files containing any of 3,000 keywords selected by record companies, including the names of popular artists and songs. The filter can be updated every two weeks to include the latest and most popular releases, the International Federation for the Phonographic Industry (IFPI) said in a statement.

The order was issued on Thursday by Justice Murray Wilcox of the Federal Court of Australia, in Sydney, as part of the recording industry's ongoing case against Kazaa operator Sharman Networks. It follows a September ruling in favour of the recording industry that found that Kazaa has been used to infringe copyrights on a wide scale.

Wilcox has indicated a reluctance to shut the Kazaa service down. He initially gave Sharman Networks two months to come up with a way to prevent works from being traded illegally on its network, and later granted a one-month extension, to 5 December.

On Thursday, Sharman Networks won a further reprieve to comply fully with the court's injunction. It now has until late February 2006, when its appeal of the decision is expected to begin. In the meantime it must reduce the illegal activity on its networks by introducing the keyword-filtering system.

"Sharman Networks is working towards compliance [with the court's latest requirement]," a spokeswoman for the company said Friday.

The company has been told it must encourage users to upgrade to the new version of its software with the filtering.

The case against Kazaa was filed by the Australian subsidiaries of most of the big recording labels, including Universal Music, Sony BMG Music Entertainment and EMI. Their catalogues include popular music by Madonna, the Beatles and thousands of other artists.

The IFPI characterised Murray's order as "a final warning" for Sharman Networks, and said the service would be shut down if it does not comply.

The 3,000-keyword system is seen as an interim measure. The judge's September ruling called for the trading of virtually all copyright files to be blocked. The labels' catalogues include, in total, tens of thousands of titles.

Sharman is now considering a new technology that has emerged since the case began, from US company Audible Magic. Its software captures an audio 'fingerprint' of a recording and stores it in a database that can then be used to block file-trading. The system appears more effective than keyword filtering, Wilcox suggested on Thursday, according to a transcript of the hearing.

It was unclear whether the labels were willing to discuss that option, however. Wilcox chided the labels' lawyers on Thursday for withdrawing their technical experts at the last minute from a meeting planned for 21 November, where the two sides were due to discuss options for filtering copyright works.

In a statement on Thursday, Sharman accused the record labels of trying to shut Kazaa down and "rid themselves improperly of a competitor" rather than working with it to agree on a new filtering system.

Lawyers acting for the record labels were not immediately available for comment.