The original proposal, floated in a December consultation, would have created a copyright exemption in favour of AI developers, placing the onus on rights holders to opt out if they did not wish their work to be used.

The idea drew strong criticism from the creative sector, which warned that it amounted to the appropriation of intellectual property to build tools that might one day replace human creators.

Whitehall sources confirmed that the UK government has now moved away from the “opt-out” approach. Peter Kyle, the science secretary, is understood to have dropped support for the proposal and is instead considering a more nuanced licensing framework.

The alternative scheme under discussion would draw on existing copyright principles, potentially mirroring current “fair dealing” provisions, which allow limited use of copyrighted material without permission. 

Under the new model, AI developers might be permitted to use small extracts of books, music and films to train their algorithms, in a compromise designed to recognise both the rights of creators and the demands of innovation.

However, ministers remain concerned that overly restrictive rules could undermine the UK’s competitiveness in the global AI sector, with broader implications for economic growth. One source cautioned against “false expectations” that the creative industries could be entirely insulated from the effects of machine learning.

Last year, leading figures in the arts – including Sir Paul McCartney, Kate Bush, Sir Stephen Fry, Hugh Bonneville and Julianne Moore – signed a petition condemning Labour’s support for broad AI training rights. The petition warned that the “unlicensed use of creative works for training generative AI is a major, unjust threat to the livelihoods of the people behind those works, and must not be permitted”.