But Sharman Networks, which owns Kazaa, said they had complied with the order by preventing people in Australia downloading the latest version of the popular software.

"We have complied with the order," said Sharman spokeswoman Julie Fenwick. "We have closed down access to getting the current version in Australia ... if a user already has it on his computer, he will see warnings."

The moves were the latest in a long-running legal battle by the Australian record industry to shut down Kazaa, which it accuses of music piracy on a massive scale.

Industry lawyers claim Kazaa users download up to 3 billion files each month, freely exchanging songs, music and television programs without paying royalties to the copyright owners.

Federal Court judge Murray Wilcox last week gave Sharman until Tuesday to develop a new version of its Kazaa Media Desktop software with a filtering system built in which was to include 3,000 so-called keywords, most likely the names of popular recording artists.

Any searches containing those keywords would be blocked by the filter, in a move aimed at stopping Kazaa users from swapping their copyrighted material. Wilcox also told Sharman to use dialogue boxes to urge Kazaa users to download the new software.

Instead, when users log onto the http://www.Kazaa.com site in Australia, they are greeted by a page carrying a warning in red letters which says: "The download of the Kazaa Media Desktop by users in Australia is not permitted."

"Sharman has thumbed its nose at the court. They were given a chance to do the right thing and they've ruined it," Peach said in a statement. "They cannot be trusted to even take the simplest steps towards complying with the court's orders and again have shown they intend to do nothing about the illegal activities occurring on a massive scale on their system."

"It is apparent that they never had any intention of applying filters, the bare minimum they needed to continue to operate the system," Peach said. "Their response is an insult to the court, the public and all artists whose work is being illegally traded on the system."

"The judgment pertained to authorization of copyright in Australia," Sharman said in a statement. "All activity that could be deemed as authorizing has stopped so as to comply with the court orders, pending the imminent appeal in February."

 BW MALL  SPONSORED LINKS   Homeowners - reduce and consolidate your debt here! Comparison shop for mortgage quotes, refinance quotes and home equity loan offers. Get up to 4 free quotes from one 60 second application.   You deserve great auto insurance. You've earned it. You expect it! Now you can get it. The AARP Auto Insurance Program from The Hartford offers great rates, peace-of-mind protection and first-class service. Click for your free quote.   If you're saddled with high monthly mortgage payments, or you just need to put your hands on more of your own money right now, get up to 4 free loan quotes and find today's best rates. Programs in every state.   Refinance today and save $200 per month.**  Get matched with up to 4 lenders in Minutes!  Bad Credit Ok. GetSmart - Smart Loans Made Simple!   Purchasing your dream home? Finance your home today at the Chase Official Site. Take advantage of today's low rates and find a loan that is best for you. Apply online.

This is cache, read story here