Mandy Hill, managing director at Cambridge University Press and the president of the Publishers Association, said the backtrack was a victory "over the self-interest of a handful of large corporations".

However, Hill said the government has not entirely ruled out allowing tech companies to use copyrighted content to train AI models without a license.

"The existing law is clear," she added. "Copyright material cannot be used for AI development and training without permission."

Anthony Walker, deputy chief executive of Tech UK, said getting the balance right is critical.

"The UK has set its sights on leading the G7 in AI adoption, but that requires a clear and enabling framework for AI innovation," he said.

"With international competitors moving ahead, the UK cannot afford for this to remain unresolved."

The issue of AI and copyright continues to be controversial.

Last year, some of the highest profile British artists - along with peers in the House of Lords - wanted an amendment to the government's Data (Use and Access) Bill.

It would have forced tech companies to declare their use of copyright material when training AI tools.

Without it, it was argued, tech firms would be given free rein to help themselves to UK content and train their AI products to mimic it - putting human artists out of work.

Sir Elton, in an interview with the BBC, compared it to "committing theft, thievery on a high scale".

However, in June last year, the government refused the amendment and the wide-ranging bill was passed.