A consultation on changes to UK copyright law is “fixed” in favour of artificial intelligence companies and will lead to a “wholesale” transfer of wealth from the creative industries to the tech sector, according to a crossbench peer campaigning against the mooted overhauls.

Beeban Kidron said the government was undermining its own growth agenda with proposals to let AI companies train their algorithms on creative works under a new copyright exemption.

Lady Kidron, an award-winning film director whose work includes Bridget Jones: The Edge of Reason, said the government consultation on amending copyright law appeared to be a foregone conclusion.

“We’ve got an open consultation but that consultation is fixed and inadequate,” she said.

The government has proposed four options in its consultation. It has indicated a preferred scenario where copyright restrictions are relaxed for AI developers, provided they flag what works they use and if the creative industries have the opportunity to “opt out” of the process. It describes such an outcome as “the primary object of this consultation”.

“Why have a preferred choice if it is an open consultation?” said Kidron.

The other options are: to leave the situation unchanged; require AI companies to seek licences for using copyrighted work; and allow AI firms to use copyrighted work with no opt-out for creative companies and individuals.

The row over copyright returns to the House of Commons on Wednesday with the second reading of the data (use and access) bill, which contains amendments from Kidron passed in the Lords last month.

“What I say to MPs is, if you are members of a government that has put all its chips on growth, why is that same government undermining creative industries that bring £126bn to the UK economy and is giving away for free the property rights of 2.4 million people who work in those industries? The creative industries impact every constituency, region and nation,” she said.

Kidron’s amendments aim to tackle the unauthorised use of copyrighted material to train the AI models that underpin products such as chatbots and image generators.

The amendments, which can be removed by the government in the Commons, subject AI companies to UK copyright law wherever they are based and allow copyright owners to know when, where and how their work is used in AI systems. It also requires the naming of web crawlers that are used to scrape copyrighted data for use in AI models.

“For more than 300 years we have had a gold-plated copyright regime but now the tech companies and the government are walking around saying it is unclear,” said Kidron. “Actually, it’s not unclear. Tech firms have come in with their [web] crawlers, taken all the copyrighted material, said ‘whoops it’s unclear’. But it is not unclear.”

She added: “My amendments mandate that companies have to account for where and when they take the material and make it transparent. It makes copyright law fit for the age of AI. It makes tech accountable.”

Campaigners for the protection of the rights of creative professionals have come out against the government proposal to allow AI companies to train the models on copyrighted work – unless creatives opt out of the process in what the government is calling a “rights reservation” system. The opt-out proposal has been met with scepticism from opponents of the government consultation, who say there is no evidence of a “water-tight” rights reservation process in any country.

The consultation also proposes measures that require transparency from AI developers on what content they have used to train their models. AI models such as the GPT-4o model powering the ChatGPT chatbot are “trained” on huge amounts of data taken from the internet, where they in effect learn to spot patterns in that information – allowing them to predict, for instance, the next word in a sentence or to create realistic images.

Kidron said pushing ahead with the changes would benefit the tech sector at the expense of its creative counterpart.

“The government is suggesting a wholesale transfer of wealth from a hugely successful sector that invests hundreds of millions in the UK to a tech industry that extracts profit that is not assured and will accrue largely to the US and indeed China.”

A government spokesperson said it was “important that everyone remains open-minded about this consultation and what it could deliver for all parties”.

The spokesperson added: “This consultation remains open and is part of an ongoing conversation, and no move will be made until we are absolutely confident we have a practical plan that delivers each of our objectives: increased control for right holders to help them license their content, access to high-quality material to train leading AI models in the UK, and more transparency for right holders.”

The technology secretary, Peter Kyle, said he “very, very deeply” respected the work produced by the UK creative industries. Speaking to the Guardian last week before Kidron made her comments, Kyle said the present legal situation regarding copyright was “not tenable”, a situation reflected by legal standoffs between tech businesses and the creative sector.

“I’m working really carefully with the tech sector so that we can produce the reassurance they need, that there will be technical solutions to things like transparency and making sure that those remarkable people, who create remarkable pieces of art, are respected for it.”