The University of NSW has threatened to axe its free wireless internet service because students are bringing in their laptops and using them to download pirated music, movies and games.

UNSW has been issuing fines of up to $1000 to students who use its free wireless network for illegal downloading. Money generated by the fines is donated to fund student facilities around campus.

She pointed to recent research by German online traffic management company iPoque that found 57 per cent of all Australian internet traffic was generated by peer-to-peer networks, which contain mainly pirated content.

A year ago the university installed filters that prevented students from downloading material over peer-to-peer and BitTorrent networks, "but that's not to say that students aren't very innovative and work around things".