David Cameron has threatened to impose tough new laws on internet firms if they fail to blacklist key search terms for horrific images by October as part a crackdown on online porn unveiled yesterday.

The Prime Minister set out a raft of reforms to protect children from "poisonous" websites that are "corroding childhood", including introducing family-friendly filters that automatically block pornography unless customers choose to opt-out.

Possessing violent pornography containing simulated rape scenes will be made a crime in England and Wales and videos streamed online in the UK will be subject to the same restrictions as those sold in shops.

Although the legal offences will apply only in England and Wales the internet "pop up" will go to all households, including in Scotland, the Coalition Government made clear.

In a speech at the NSPCC headquarters in London, the Prime Minister acknowledged the issue of extreme and child pornography is "hard for our society to confront" and "difficult for politicians to talk about".

Family friendly filters will be the default setting for new broadband customers by the end of the year and only account holders will be able to change them.

Existing customers will be presented with an "unavoidable decision" about installing the filters by the end of the 2014, Mr Cameron added.

"We are not prescribing how the ISPs should contact their customers – it's up to them to find their own technological solutions. But however they do it, there will be no escaping this decision."

Experts from the Child Exploitation and Online Protection Centre (Ceop), which is set to become part of the National Crime Agency (NCA), will be given enhanced powers to examine secretive file-sharing networks.

But former Ceop chairman Jim Gamble, who resigned in protest over the merger with the NCA, warned the Government was not doing enough to deter paedophiles who shared abusive images of children online and claimed abusers would "laugh" at the porn filters.

"There are 50,000 predators we are told by Ceop downloading images from peer-to-peer, yet from Ceop intelligence only 192 were arrested last year. That's simply not good enough," he said.