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We feel your pain. That’s what executives behind the Kazaa file sharing network reported telling record companies who were concerned about piracy online. The news comes today from Australia, where the Sydney-based Kazaa is defending against a copyright infringement lawsuit by thirty labels around the world.

In what amounts to at least a minor revelation, Reuters reports that “Philip Morle, Sharman’s director of technology, told the federal court in Sydney the Distributed Computing Industry Association had hosted and coordinated a number of discussions between Sharman Networks and various U.S. record companies about the issue of unauthorized file sharing.”

But many in the P2P crowd find it hard to feel for Sharman. Kazaa diehards – the very same people who helped the service become a grass roots phenomenon – were outraged a couple years ago to learn that the program was secretly employing spyware. Within days, a Russian hacker created and freely distributed a spyware-free version called Kazaa Lite. “I only want to make it clear that Kazaa has to stop misleading the people who use their software,” the programmer said at the time.

Sharman tried fighting back by issuing a statement warning that “consumers are being deceived with ripped off and highly suspect code.” Then, it cashed in - by selling a “premium” version of Kazaa that enabled subscribers to use the program ad-free.

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