It is the first time that research has quantified the scale of illegal downloads. The BPI says that 8m in the UK claim to be downloading music from the internet and 7.4m do it through illegal sites. This coincides with a 32% fall in album sales over the past year.
The BPI is fighting back with a new instant messaging campaign that will warn uploaders that they face court action if they do not disable file-sharing software on their computers.
Peter Jamieson, chairman of the BPI, said: "There is no clearer evidence of the damage that illegal downloading is doing to British music and the British music industry.
"Illegal file-sharing is causing real financial damage to artists, to songwriters and to record companies, publishers, retailers and everyone involved in the business."
The body is directing people towards new legal download services, saying that there are hundreds of thousands of tracks available to buy on the internet.
Similar moves in America by the RIAA have drawn widespread criticism after children were found to have been served subpoenas.
Last week the star George Michael announced that his new album 'Patience' would be the last he released on CD, saying that in future he would make new material available to download on the internet for a donation.
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