Companies are fighting back against the misuse of email and installation of illegal software by keeping an eye on their employees' internet habits, according to anti-piracy organisation Fast (the Federation Against Software Theft).

Fast's annual UK corporate survey revealed that 55 percent of firms gave internet access to all of their employees, and of these a massive 80 percent monitored exactly what employees are downloading when they surf the net.

But this big brother approach must be used carefully, according to privacy groups and trade unions, which have lobbied the government over these snooping powers.

"These powers must be limited and not exploited," said Simon Davies, spokesman for civil liberties group Privacy International.

But Fast believes these powers are a necessary safety check for companies.

"Regulating employee email, internet and software use isn't a big brother tactic in a negative sense," said Richard Wilmott head of Fast. "The bottom line is no company is immune from e-risk."

"The reality is that illegal software can not only result in costly litigation and liability for the CEO, it can also cost an organisation in terms of inefficiency and potential viruses and have a negative effect on their organisation's reputation," added Wilmott.

Under the Electronics Communications Act employers were given free reign to monitor employees' email, an entitlement that appears to contradict the Human Rights Act which codifies an individual's right to privacy and private correspondence in the workplace.

The Information Commission released a set of guidelines last summer to simplify employers' rights, but controversy still clouds the Act.

"The Act was not designed to enable interception of all communications in the workplace, but to prohibit such interception unless it is permitted by the Lawful Business Practice Regulations," said David Smith, assistant information commissioner.

"You cannot be present in every office every hour of the day to keep an eye on what employees are doing and you cannot expect employees to exercise sound judgement 100 percent of the time, therefore automated monitoring of internet access makes smart business sense," added Fast's Wilmott.

For advice on software compliance, visit Fast's website.