A grand jury in America has ordered the maker of the controversial Grand Theft Auto videogames to release details of how and why it created a sexually explicit game-within-a-game.

The news sent shares in Take-Two Interactive sharply lower, with the stock losing 20 per cent of its value, to $10.44, in after-hours trading in New York.

In a statement released overnight, the company said it had received two subpoenas from the Manhattan district attorney's office earlier this month, requesting documents linked to topics ranging from a recent switch of auditors to company acquisitions.

The subpoenas also demanded documents that could reveal who knew of a decision to include a hidden X-rated game, dubbed "hot coffee", within Grand Theft Auto: San Andreas.

The discovery of the hidden feature, which could only be accessed after a separate program was downloaded from the internet, sparked a furious round of condemnation in Washington last year.

Senator Hillary Clinton was among those who called for the US Federal Trade Commission to launch a full-scale investigation to discover who had inserted the explicit material.

On its discovery, the game was given a restrictive "adults only" rating, prompting several retailers to pull it from their shelves. The events are thought to have cost Take-Two millions of dollars in lost sales and the ensuing scandal led to lawsuits being filed by shareholders and the city of Los Angeles.

The fallout from "hot coffee" has been rumbling on ever since. In January, Barbara A Kaczynski resigned as a member of the company's board and chairwoman of its audit committee, expressing concerns over the company's management and the illicit images incorporated in the San Andreas title.

But the hidden game forms only part of the probe. The district attorney is also seeking information about Take-Two's recent decision to hire Ernst & Young as its auditors, replacing PricewaterhouseCoopers.

Last year, the company reached a settlement with the Securities and Exchange Committee, the US financial watchdog, in which it agreed to pay a $7.5 million civil fine. It said the SEC had been investigating accounting practices and the restatement of its earnings between 2002 and 2004.

In 2002 the company announced that it would restate nearly two years' worth of financial returns, a move that led trading in its stock to be suspended for three weeks.

Despite dominating the videogame charts through its Grand Theft titles, which have generated more than $1 billion in sales, Take-Two has been under pressure to cut costs as consumers wait for the next generation of consoles before buying new games.

After a run of losses, the company recently said it expects to return to profitability during the three months to October.

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