BSkyB today made public details of its dispute with Virgin Media over the fees it charges for carrying its TV channels after it said Virgin had refused its latest offer.

Virgin Media immediately countered by saying it had always been open to a realistic offer and that Sky had refused arbitration.

Virgin took Sky's basic channels off its platform more than two months ago after the two sides failed to agree the amount Virgin should pay for them. Ten days ago Virgin Media warned in its quarterly results that it was starting to lose customers due to the lack of these basic Sky channels.

The satellite broadcaster said its chief executive James Murdoch had written to Virgin Media chief executive Steve Burch a week ago to put forward a new offer, which would 'split the difference' between each side’s last offer before negotiations broke down in February.

But Mr Burch rejected this offer in writing last night.

Sky, which is 39.1 per cent owned by News Corp, parent company of The Times, said in a statement: "Sky’s proposal amounted to an increase of less than £5 million per year on Virgin Media’s last offer to Sky, and an equal ceding of value by Sky from its last offer position."

"Sky had hoped that Virgin Media would have agreed to this compromise proposal which would have seen Sky’s basic channels back on-air within days."

It added that it now believed that "there is little prospect of Virgin Media agreeing to restore Sky basic channels to its network, at least for the foreseeable future. "

Virgin Media responded with a statement which claimed: "Sky's account of recent events and our respective negotiating positions is deliberately misleading."

It made public Steve Burch's letter of yesterday which it said, made clear, it had not rejected negotiations.

"We have always been open to a realistic offer from Sky and have made this clear, including in our letter to them of yesterday.

"However, Sky's proposal would have been unacceptable at the end of February and it is certainly unacceptable now, given all that has happened since.

"Today's announcement from Sky comes after Sky's rejection of an arbitration offer and subsequent efforts to structure discussions.

"We are, moreover, surprised that this has become public and can only conclude it is a crude attempt to exert undue pressure by putting negotiations under the public spotlight.

"This is the quickest way to undermine the goodwill essential to a successful outcome and raises questions about Sky's commitment to striking a fair and reasonable deal."

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive