Digicel, the mobile phone company run by Irish billionaire Denis O'Brien, is suing Cable & Wireless for in excess of £300m, accusing the company of impeding its entry into the Caribbean telecoms market.

According to the BBC, Digicel says it has leaked papers showing C&W implemented a "well thought-out campaign" to stop competition in some Caribbean markets. Digicel chairman Denis O'Brien said he had been sent an internal report from C&W that set out a detailed plan showing how the firm could use "delaying tactics" to illegally prevent competitors from setting up business in the Caribbean.

Mr O'Brien, and activist investor in fellow Irish businessman Tony O'Reilly's Independent News & Media, made a fortune selling his phone company Esat Telecom to BT seven years ago. He then founded Digicel to take up opportunities in the Caribbean’s liberalizing telecoms sector.

Digicel subsequently won many of the licences and now has 4.7 million customers in 22 markets, having successfully launched in Jamaica in 2001. Digicel also now operates in St Lucia, St Vincent & the Grenadines, Grenada, Trinidad & Tobago, Barbados and Guyana, where it won telecoms licences between 2002 and 2006 and started trying to connect with C&W's network.

Its case centres on difficulties it claims it experienced gaining interconnection with C&W's existing network. This physical connection with an existing operator is crucial to any new entrant, who needs to be able to allow its customers to call and be called by people on other networks.

However, it claims it was forced to delay operations in many markets by up to six months - partly because of delays in securing interconnect deals with C&W.

According to its press release, "In St Lucia the launch by Digicel was delayed from before Christmas in 2002 until late March 2003 ... in Grenada it was delayed by 5 months; in Barbados by over 6 months; in Cayman by over 2 months; in Trinidad & Tobago by at least 4 months and in Turks and Caicos the launch was delayed by over 3 months."

Aside from lost market share and future profits, Digicel says it lost revenue from call charges and interconnection fees payable by C&W in respect of inter-network calls originating on C&W's networks, and from what a company press release called “the unlawfully protracted process of interconnection in each territory.”

Meanwhile, Cable & Wireless has dismissed claims it illegally prevented competition in the Caribbean, describing them as no more than a "spoiling tactic".

In a statement C&W confirmed it has received the claim. "We believe the claim is without foundation and it will be vigorously defended," it added.

"C&W is gaining market share in the Caribbean where we are market leader in 10 out of 14 of our markets," it added "We believe that the claim is no more than a deliberate spoiling tactic by Digicel".

"We have received an unspecified claim this morning," Cable & Wireless said in a statement read by outside spokesman James Wyatt-Tilby. "We don't believe it has any foundation."

The case is not expected to reach the courts until 2008.