Business secretary Lord Mandelson wants to beef up the anti-piracy measures outlined in the Digital Britain report to place the power to suspend connections of targeted copyright infringements in the hands of the secretary of state rather than regulator Ofcom.
Around 100 musicians have also signed up to an alternative Featured Artists Coalition plan for a 'three strikes' approach to the problem, in which copyright infringers would get two letters of increasing severity before their connection is 'throttled' - reduced to just basic web surfing and email.
However, TalkTalk has been highly critical of both approaches as they are based on the principle of "guilty until proven innocent".
The service provider further believes that these punishments would lead to an increase of WiFi hacking as pirates start using the connections of innocent users to freely download the material that they want, reports BBC News.
"The Mandelson scheme is every bit as wrong-headed as it is naive," said TalkTalk director of strategy and regulation Andrew Heaney.
"The lack of presumption of innocence and the absence of judicial process combined with the prevalence of WiFi hacking will result in innocent people being disconnected."
To highlight the problem, the internet service provider surveyed a typical street in Stanmore, Middlesex, and used "readily available software" to find that only one household in 23 had the highest level of security protection on their wireless network.
The company said that most households on the street had WEP security-enabled networks, but hackers recently identified a structural weakness in the software which means that password combinations can be more easily cracked.
After breaking into two connections (with prior permission given by the users), TalkTalk was able to download legal music files of Barry Manilow's song 'Mandy' and the entire soundtrack to 1992 movie Peter's Friends. The company will now give the residents advice on how to boost their security
Speaking to Digital Spy, IP Vision commercial director David Bloom said that a more stringent approach to file-sharing such as proposed by the government appears "tantamount to unenforceable".
As most homes have a number of different users accessing the broadband connection, Bloom said that this brings a "tangled web of issues" around exactly who should be punished for an infringement.
However the British Phonographic Industry (BPI) is confident that a "robust" system for gathering evidence will ensure that only persistent file-sharers are targeted by the measures.
BPI spokesman Adam Liversage told BBC News: "The account holder would receive a notification in the first instance, which would represent an opportunity to discuss file-sharing with others in the household and which would provide the account holder with the information and tools to help ensure that the account is not used illegally again.
"This information would extend to explaining to the account holder how they can secure their wireless router to ensure that it isn't accessed by unknown third parties. But ultimately, householders will be held to account for what happens on their own networks."