Tiscali has launched a legal action against BT after the telco sent letters to Tiscali customers casting doubts on its future.

The letter carried the headline 'Tiscali chief plots sell-off' and is widely seen as an attempt to create doubts in the minds of Tiscali customers following an announcement earlier this year that it intends to sell its broadband operations.

The letter went on to explain how customers could obtain their own MAC address, and suggested that they might like to switch to BT.

Tiscali has now officially launched legal proceedings against BT, claiming that the letter amounted to "defamation and malicious falsehood".

"The next stage is for us to file a further court document and we will then learn the terms on which BT intends to defend the claim, if at all," said a spokeswoman for Tiscali.

BT, meanwhile, has denied the allegations, claiming that the marketing stunt was a "legitimate and reasonable business practice".

A question mark still hangs over the means by which BT obtained Tiscali customer details in the first place.

The telco claims to use only "reputable external sources" for such information.