A London pre trial court has ruled that UK Internet service provider Demon Internet is liable for defamatory comments that were posted on one of its news groups.

The issue of liability of Internet content is a matter close to the heart of many Internet users and is destined to have a profound effect on freedom of speech on the Internet.

In this case, Laurence Godfrey, a British physicist, alleges that a forged message containing defamatory information appeared in the soc.culture.thai newsgroup in January 1997, and the offending article remained on Demon Internet?s despite his requests to remove it.

The message itself did not originate from a Demon newsgroup, however, but was replicated from a Usenet newsgroup and displayed on Demon?s server, among others. Godfrey has already won a number of separate lawsuits against other ISPs.

The point of law centres around whether Demon is responsible for information posted to and made available from newsgroups that are held on its servers.

Demon is appealing against the pre trial ruling and gathering support from Internet groups to lobby the government to change the Defamation Act so that ISPs are not regarded as publishers of the information they hold.

David Furniss, director of Scottish Telecom's Internet Services, which owns Demon Internet, said he was confident of winning the appeal, but only, "if the issues are explained and understood, and people understand the possible outcome."

Civil liberties campaigners Cyber Rights & Cyber Liberties ( CR&CL UK), which plan to support Demon's appeal, believe a negative ruling would make Britain a hostile place for network development in the 'information age.'

Yaman Akdeniz, director of CR&CL, said: "The decision will have a chilling effect over Internet communications and will force UK ISPs to take a proactive role in relation to Internet content. This is most undesirable and unacceptable. The Defamation Act does not give adequate protection to ISPs and unfortunately they remain the 'usual suspects' when civil claims through defamation suits are brought against them."

"It is also totally unacceptable that an offended party should simply notify an ISP claiming the information to be legally defamatory. The current state of UK law forces ISPs to be defendant, judge, and jury at the same time. Notice should not be enough in such cases," he said.

When a Bavarian court ruled last May that Compuserve was liable for pornographic material accessed through its online service, Psinet actually moved its Web servers out of the country.

On the advice of the Internet Watch Foundation (IWF), however, Demon has agreed to remove any potentially libellous or offensive material, but if the ruling goes through, it appears that any individual could force an ISP to remove content on demand.

According to Scottish Telecom Internet Services? Furniss, the practicalities of monitoring all the information currently available on the Internet would mean that suppliers could only offer users limited services, which would greatly reduce the availability and variety of content.

"The ruling suggests that ISPs should be held liable for the information they transmit between one party and another. This potentially opens up the Internet industry at large to millions of similar unjustified complaints," he attested.

Demon has been working with bodies, such as the Internet Watch Foundation and the government to establish a clear legal framework for the online world.