Matsushita, the Japanese electronics giant, today said that the replacement of faulty mobile batteries supplied to Nokia could cost it a much as Y20 billion (£86 million).

Earlier this month, users of Nokia mobile phones were urged to check their handsets after the company said that it would replace 46 million batteries after at least 100 of the components overheated while being recharged.

The “product advisory” from the Finnish company raised further questions over the reliability of the lithium-ion battery technology commonly used in mobile gadgets.

Last year, Sony was forced to recall nearly 10 million lithium-ion laptop computer batteries after pictures of one machine bursting into flames in an airport lounge were posted on the internet.

Matsushita, best known for its consumer brand, Panasonic, said it had no plans to revise its earnings outlook.

The company expects its group operating profit to grow 3.8 per cent from a year earlier to Y477 billion for the year to March 2008.

Nokia said that “no serious injuries or property damage have been reported” from the faulty batteries, but a spokeswoman added it was possible that an overheating battery could cause damage to a surface on which it was left.

The alert issued by Nokia, the world’s largest mobile phone maker, covers a batch of its most widely-used batteries, with the model code BL-5C. The affected units were supplied by Matsushita between December 2005 and November 2006.

Sony's battery recall cost the Japanese group about 51 billion yen (£215 million) last year.

Sanyo, another battery maker, has been hit by similar problems and in March said that it would share with Lenovo, the PC maker, the cost of recalling 205,000 Sanyo-made laptop batteries.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax