I present the response from Matt Phillips:
Hi Ian I can't really offer you any legal advice on this matter as I don't know the detail.
Basically it's about using music with permission.
Generally speaking - if you're making copyrighted music (anything released by a label) available to share with other people without the permission of the copyright owner you're infringing copyright law and come on to the radar of our anti-piracy unit.
My advice would be, if in doubt, don't do it.
If you have any further queries, please contact our legal department.
Hurrah for substance-filled replies. I understand he was probably making the general case, but labels do release public domain songs, and any song is protected by copyright, not just those released by labels. Plus, the label would also have to be a member of the BPI to come onto their radar, I assume?