People who repeatedly share copyrighted content could have their access to the internet removed, Stephen Timms has said.
The move would be a "last resort" under new measures set out by the business minister.
Other changes would see the ministers take extra powers to order Ofcom to clamp down on illegal file-sharing.
The forthcoming Digital Economy Bill will mean "repeat offenders" face having access to download sites blocked and their broadband speeds reduced.
And their internet accounts could also be temporarily suspended under the measures.
Ministers said that previous proposals for Ofcom to review the measures needed to tackle file-sharing would take "too long" to implement.
"The new ideas outlined today would potentially allow action to be taken earlier," said a statement from the Department for Business, Innovation and Skills.
The plans would see internet service providers required to take action against their customers.
Business minister Stephen Timms said: "Technology and consumer behaviour is fast-changing and it's important that Ofcom has the flexibility to respond quickly to deal with unlawful file-sharing.
"We've been listening carefully to responses to the consultation this far, and it's become clear there are widespread concerns that the plans as they stand could delay action, impacting unfairly upon rights holders.
"So we look forward to hearing views on our new ideas, which along with those already received, will help us determine the best way to tackle this complex challenge."
Dods Parliamentary Communications Ltd