Virgin Media’s carriage dispute with rival BSkyB was heading down to the wire after the cable group rejected Sky’s latest offer amid an increasingly acrimonious war of words.

Late on Monday night, Virgin Media rejected the latest set of proposals from Sky – which is 39.1 per cent owned by News Corporation, parent company of The Times – without proposing an alternative.

Steve Burch, the chief executive of Virgin Media, said that Sky’s latest set of proposals amounted to “smoke and mirrors” and a determination “to use their market power to bully competitors”.

Sky, however, indicated that it wanted a 19 per cent increase in the fee it charged Virgin Media for access to its entertainment and news channels. Virgin Media said that the extra money excluded payments for new services, such as high definition content and extra channels such as Sky Three. Virgin Media continued to describe Sky’s latest offer as amounting to a doubling of the existing carriage cost, which amounts to about £25 million, based on certain minimum guarantees provided by the cable operator.

A Sky spokesman said: “The emotive tone and intensity of Virgin Media’s communications do the company no credit. Virgin’s management appears to have a greater interest in denigrating Sky through a public relations offensive than in delivering real benefits to customers.”

An agreement to carry Sky’s entertainment channels expires on Thursday. In theory, the channels could be dropped from the cable operator, costing the satellite broadcaster £15 million to £20 million in operating profit this year.

However, it was possible that negotiations could continue for a period if both sides were willing to try to reach a settlement.

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