The British Software Alliance (BSA) has launched an anti-piracy campaign targeting businesses in Manchester, which it claims is the UK's second worst city for such offences.

The trade association will contact 5,000 companies in the area over the next six weeks to cut the use of counterfeit software, which costs the UK over £1bn each year. The BSA is already investigating 11 Manchester firms over potential licensing violations.

The BSA is encouraging companies to take a proactive approach to the issue, and is offering free programs to help with the process of auditing software. Businesses will not be punished for any under-licensed programs that are revealed, provided that steps are taken to rectify the situation by the campaign's close on 30 June.

"The heavy-handed approach can be a real turn-off, so we are very keen to talk about the benefits of software management," said Julie Strawson, chairwoman of the BSA's UK committee.

But the BSA will also continue to push for stronger penalties for those guilty of piracy. Software theft must be treated as a criminal offence, said Strawson.

"Unless there is some punitive element to being caught using illegal products, businesses will not sit up and take notice," she said.

Last week the BSA reported that the UK had reduced its piracy rate for the first time in three years, down a single point to 26 per cent.