Terry Smith, the head of Tullett Prebon, yesterday lashed out at the rival Cantor Fitzgerald for rejecting his £302 million bid for a spin-off company, reigniting a vicious feud between the men who control the world of interdealer broking.

Mr Smith attacked eSpeed, the electronic trading network controlled by Cantor, for rejecting his overtures for the second time in two years and accused the company of ignoring the interests of minority shareholders.

It is hard to find a feud as deep and vituperative as that between three of the wealthiest men in the City: Terry Smith, Howard Lutnick, the head of Cantor Fitzgerald, and Michael Spencer, the chief of Icap, another interdealer broker (IDB).

While interdealer broking — the business of over-the-counter trades in bonds and derivatives between banks and hedge funds — is rather dry, the feuding and backbiting between the brokers is far more colourful, as is their lifestyle.

In the world of IDBs, there are stories of personal threats, foul-mouthed tirades across trading floors and wild evenings out. One broker at Cantor Fitzgerald famously told a court that most nights he would drink eight bottles of lager and ten shots of vodka, as well as snorting four grams of cocaine a week.

The level of personal enmity between Messrs Smith, Lutnick and Spencer and their respective firms all too often spills out into the public domain.

This time round, the row is between Mr Smith and Mr Lutnick. Mr Smith insisted yesterday that his bid for eSpeed was in the best interests of all shareholders. “It would unlock shareholder value that is now unavailable to the minority shareholders,” he said.

Tullet Prebon has offered $12 a share for eSpeed, which was floated on Nasdaq in 1999 but where Cantor and Mr Lutnick retain 88 per cent of the voting rights through controversial class B shares.

Mr Smith pointed out that eSpeed’s shares have been flat since the initial rejection two years ago, while Tullett’s have risen 47 per cent. He claimed that some of the major dealer clients of eSpeed would prefer its platform to be owned and operated by Tullett Prebon.

He added: “We would high-light the fact that eSpeed’s board has not deemed it necessary to consult with any interested party other than Cantor in reaching this decision.”

Buying eSpeed would accelerate Tullett Prebon’s move into electronic broking.

Shares in eSpeed gained 8 per cent to $10.45 on Tullett’s announcement. Tullett Prebon closed down 9½p at 515p, a fall of nearly 2 per cent. Cantor Fitzgerald declined to comment.

The players

HOWARD LUTNICK, a keen tennis player worth about £500 million, joined Cantor Fitzgerald in 1983 and has headed the firm for 15 years. In the 1990s Mr Lutnick became known for his lavish lifestyle. For his 40th birthday, he and his wife chartered a 50-metre yacht with four other couples and cruised the Med. They also threw a Georgian costume ball for 45 couples at Cliveden. Most of the guests were flown in from New York at Mr Lutnick’s expense.

TERRY SMITH, who last year expressed interest in buying the Financial Times, is known as a tough rival. Mr Smith, who logged that FT interest soon after declaring a settlement with the paper in a legal fight, is never far from controversy. The amateur boxer left the broker BZW after writing a “sell” note on Barclays, its owner. UBS dismissed him over his Accounting for Growth book, which used some clients as examples of how companies manipulate their accounts.

MICHAEL SPENCER, 51, a friend of the Conservative leader David Cameron, founded his Icap money-broking firm in 1986. It is worth £3 billion and trades on the LSE. Born in Kuala Lumpur, Mr Spencer also owns the City Index spread-betting firm and is chair of Numis Securities, the stockbroker. He studied physics at Oxford, then joined Drexel Burnham. Married with three children and worth £614 million, he was fired from Drexel for trading errors.

The history of eSpeed Inc.

1945: Bernie Cantor and John Fitzgerald team up to create bond brokerage Cantor Fitzgerald.

1972: Cantor Fitzgerald introduces the world's first electronic marketplace ("screen brokerage") for US government securities, after acquiring Telerate.

1991: Howard Lutnick named president of Cantor Fitzgerald.

January 1996: Cantor Fitzgerald begins using the eSpeedî system internally to conduct electronic trading.

March 1999: The first fully electronic transaction, using the eSpeed system, is executed by a Cantor Fitzgerald client.

December 1999: eSpeed is spun off from Cantor Fitzgerald in a $220 million initial public offering.

February 1, 2001: eSpeed signs software solutions deal with Federal Home Loan Bank

September 11, 2001: Cantor Fitzgerald, eSpeed and TradeSpark lose 658 people in the attack on the World Trade Centre — nearly one quarter of the total casualties.

September 13 2001: The company’s redundant backup systems bring the enormous US Treasuries market back online (days ahead of the New York Stock Exchange reopening).

December 31, 2001: eSpeed concludes its first ever profitable quarter.

December 17, 2002: eSpeed offers world's largest combined electronic cash and futures market through agreement with Chicago Board of Trade.

August 2003: eSpeed announces expansion into mortgage backed securities and interest rate swaps.

2005: Hitherto unknown bid for eSpeed from Tullett Prebon rejected

April 2007: Tullett returns and is rejected for second time.

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