Sir Stelios Haji-Ioannou, the founder of easyJet, has ramped up his dispute with the low-cost airline's board by refusing to approve the company's annual accounts.

In a formal statement attached to easyJet's final results, the entrepreneur, who owns more than a quarter of the company, sets out his reasons for his concern over accounting policies adopted by the rest of the board, which he believes do not reflect "current commercial realities and the macro-economic climate".

Sir Stelios is trying to have two non-executive directors of his choosing appointed to the board, and is in dispute with the management over the pace of growth at the airline and its continuing failure to pay a dividend.

The figures themselves show the effect of high oil prices with underlying pre-tax profit down from £191 million to £123 million.

EasyJet has yet to say if it will accede to Sir Stelios's wish to have two existing employees appointed to the board. However, legally, the company's accounts can be passed without Sir Stelios' approval.

Neil Mirchandani, a partner in the dispute resolution practice at Lovells, the City law firm, said the move was largely symbolic. "The accounts have in fact been approved by the rest of the board and by PricewaterhouseCoopers [easyJet's auditor]."

But he said: "It is quite unusual. Under normal situations if a director is unhappy or unsatisfied with accounts they would resign rather than sign-off. Stelios is still a major shareholder in the company, so he is not simply going to give up."

It is thought that the two parties are negotiating just what his rights of boardroom representation are, as set out in an agreement drawn up in 2000 when he stepped back from the company.

The dispute is whether he can nominate a chairman and one director or a chairman and two directors. Sir Stelios has said he does not wish to be chairman.

His criticism of the board's accounting policies centres around the other directors' decision to regard the company as a "single cash generating unit" rather than as a series of businesses, as rival Ryanair does.

He believes the value put on landing slots at Gatwick acquired with GB Airways a year ago is "based on optimistic assumptions about future revenues, particularly in the current economic climate".

He says that as many airlines have stopped operating from Gatwick, such slots are likely to become freely available in future.

Sir Stelios also thinks that the aircraft acquired with GB Airways —seven with one more to be delivered in future — should be written down in the accounts to their estimated market value.

"I am left without any other options but to abstain from voting on the accounts as a director of easyJet," he says. "I believe it is in the interest of all shareholders to be more prudent at the present time."

His main dispute with Andy Harrison, the chief executive, is over the rate of expansion.

Sir Stelios, who is no longer involved in the day-to-day running of the airline, wants it to restrict orders of further aircraft because of the difficult economic climate.

Mr Harrison defended easyJet's accounting policies in a conference call with journalists. "The concerns Stelios has raised in his letter are not new news.They have been fully considered by management, the audit committee and by the auditors. The issues that Stelios has raised are non-cash items, they are non-trading items and therefore have no impact on the value or commercial strength of the company."

Asked about the dividend policy, he said: "The board's view is that it's just premature to be talking about dividends at the point in the cycle where we are now." The board had no "point of principle" against paying a dividend when the airline was sufficiently profitable.

He said the airline was taking a "very practical approach" to future growth, and in deliveries from Airbus, which provides its craft. "We have flexibility with our Airbus order. We're able to defer up to half of future deliveries, assuming we give Airbus enough notice." Four deliveries have been deferred from 2010, though it was too late to head off any already ordered for 2009.

Mr Harrison said the airline had delivered a good trading performance in the last financial year, while winter bookings for this quarter were slightly ahead of last year. Passenger numbers were up 17 per cent last year.

Mr Harrison said there were signs of a "flight to value" by business and leisure passengers, which would benefit low-cost airlines.

The financial statement said the rest of the board had unanimously approved the accounts and PricewaterhouseCoopers had given them an unqualified report.

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