The European Parliament today voted for of a watered-down law designed to combat counterfeiting of copyrighted goods such as software and recorded music, and patented inventions.

The version of the Intellectual Property Rights Enforcement Directive agreed by the European parliamentarians this afternoon does away with a controversial proposal to slap criminal sanctions on private individuals who exchange music files over the Internet.

The law gives companies new powers to combat professional pirates, criminals and counterfeiters, including raiding homes, seizing property and asking courts to freeze bank accounts to protect trademarks or intellectual property they believe are being abused or stolen.

At one point during debates of the draft, privacy and civil liberties campaigners were horrified to hear that these sanctions might possibly be extended to private individuals.

The eventual version leaves home users safe, though, which will come as a relief to the estimated 5 million file-swappers in Britain, and the countless more around Europe.

One EU spokesman said: 'It is not in the interest of rightholders to spend a lot of time and money in litigation to catch offenders who are simply sharing a few files with a handful of friends.'

The text will be presented to national governments at a meeting in Brussels on Thursday for their political endorsement. However, this step is unlikely to change anything because the governments already reached agreement with the European Parliament and the European Commission before Tuesday's vote.

Member states will have to transpose the directive into their national statute books within 18 months to two years.