Carl Icahn, the billionaire shareholder activist, accused Time Warner of "poor decision-making" and a "dismal record of mistakes" today in an escalation of his campaign for a change of strategy at the media conglomerate.

Mr Icahn, a hedge fund manager who speaks for investors who own about 2.8 per cent of Time Warner, issued an open letter to the company’s board in which he criticised recent deals, such as selling Warner Music Group and Comedy Central at discounted prices.

He also attacked its failure to beat Sony in the auction of Metro-Goldwyn-Mayer, the iconic film studio.

"Unless this legacy of poor decision-making is fully recognised and the board is held accountable, the dismal record of mistakes and inaction will continue to the detriment of shareholders," the letter says.

Mr Icahn also reiterated his recommendations that the company initiates a $20 billion (£11.4 billion) share buyback and spin off 100 per cent of its Time Warner Cable unit.

Time Warner has already pledged to buy back up to $5 billion in stock and divest itself of its 16 per cent stake in the cable company.

Mr Icahn is seen as a corporate raider for his agitating tactics at Blockbuster, the video rentals group, and Kerr-McGee, an oil and gas company, where he initiated sweeping changes after buying large stakes.

His tactic is known as "greenmailing" — he invests in a company that he believes is badly managed and uses the acquired influence to make alterations. In the past month the funds aligned with Mr Icahn, including his own hedge fund, have raised their stake from 2.6 per cent to 2.8 per cent of Time Warner.

Mr Icahn, whose wealth is estimated at $7.8 billion, said that Time Warner’s "cardinal sins" date back to its ill-fated $200 billion merger with AOL, which led to the loss of more than 75 per cent of market value over two years.

He said that 12 of the 15 Time Warner board members at the time of the AOL deal, including Dick Parsons, then the joint-chief operating officer and now chief executive, supported the merger. On that basis, he questioned whether they should still be "steering the corporate ship".

Mr Icahn also said that Time Warner had a bloated cost structure, saying that his syndicate of investors intends to hire an industry consultant to analyse and compare the company’s costs with those of its peers.

Since the AOL deal, Mr Parsons has cut Time Warner’s debts from more than $30 billion to about $13 billion and has settled government and shareholder lawsuits arising from the AOL deal. The company could reduce its debt further by spinning off a larger part of the cable network and may yet merge AOL with MSN, Microsoft’s internet offshoot.

Time Warner and Microsoft have been discussing ways to combine their internet assets, including investment by the software giant.

Time Warner said that it would provide greater detail of its plans "in the coming weeks", adding: "We will proceed on our course, committed to increasing the value of this company and delivering a highly competitive return for all of its shareholders."

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