Virgin Media has filed legal proceedings against BSkyB in the High Court, making good a threat to sue the rival pay-TV group over a dispute over the carriage fees paid to air channels.

The cable group, formerly NTL, accused Sky of "abusing its dominant position” by requesting “excessive charges” for the right to air Sky’s five basic channels, which include Sky One, the owner of rights to shows including The Simpsons and Lost.

Sky is 39.1 per cent owned by News Corporation, the parent company of The Times.

Sky’s basic channels were switched off on Virgin’s cable network on March 1, after a last-minute attempt to hammer out a distribution deal failed.

Virgin Media said today that its legal action was based on the UK Competition Act and Article 82 of the EC Treaty, both of which prohibit a company from abusing its dominant position.

The company said in a statement: “Sky … is dominant in the UK pay-TV market and has engaged in a strategy to stifle competition by using its dominance against Virgin Media”.

Commenting on today’s statement by Virgin Media, Mike Darcey, Sky’s Chief Operating Officer, said: "This action is without foundation and is an obstacle to bringing back Sky’s basic channels for Virgin Media customers. The best and quickest way to give customers what they want is to resume negotiations and we’ve invited Virgin Media to return to the table."

Sky said last month that Virgin’s accusations were "without foundation" and that it would "defend itself vigorously" against any legal action. The company also indicated that it saw no need for arbitration.

Virgin has claimed that Sky wanted to "nearly double" the annual fee it charges for its five basic channels, to £48.5 million.

Those negotiations followed talks in which Sky secured an 85 per cent discount in the amount it pays Flextech, a division of Virgin Media, for channels including Living and Bravo.

Steve Burch, the Virgin Media chief executive, said in a statement: ”Litigation is obviously a serious step and a last resort but we are determined to have these issues resolved as quickly and fairly as possible.”

Relations between the two companies deteriorated sharply last year after Sky bought a 17.9 per cent stake in ITV.

The deal effectively scuppered Virgin Media’s ambitions of merging with the UK’s largest commercial broadcaster.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts